Some would like this question avoided in order to dodge the resulting controversy. That would be a mistake. I understand and respect that there are some who sincerely believe that competition among credit unions is good for the credit union member and therefore should not be restrained. While there is certainly some validity to that argument, it tends to downplay the fact that credit unions are quintessentially cooperatives. They are cooperatives both in their internal structures and in their inter-credit union operations.
Unrestrained competition is by definition the antithesis of cooperation.
After all, the legitimate objective of free market competition is to destroy competitors and steal their customers. Certainly a mild level of competition is not harmful, but unrestrained free market competition among credit unions is destructive and might encourage predatory practices. That would make it very difficult if not impossible for credit unions large or small to maintain the trust needed to effectively pool their assets, liquidity, operational skills and expertise. It could result in the cherry-picking of their more affluent members and a loss of mentoring and other benefits. An important effect of this could be the drying up of the liquidity pools smaller credit unions need access to in order to meet the needs of their members of small means.