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Are Credit Unions Too Small?

David C. Wheelock¹; Paul W. Wilson²

¹ Federal Reserve Bank of St. Louis · ² Clemson University

U.S. credit unions serve 93 million members, hold 10% of U.S. savings deposits, and make 13.2% of all nonrevolving consumer loans. Since 1985, the share of U.S. depository institution assets held by credit unions has nearly doubled, and the average (inflation-adjusted) size of credit unions has increased over 600%. We use a local-linear estimator, dimesion-reduction techniques, and bootstrap methods to estimate and make inference about ray scale and expansion-path scale economies. We find substantial evidence of increasing returns to scale among credit unions of all sizes, suggesting that further consolidation and growth among credit unions are likely.

DOI

10.1162/rest_a_00121

Volume

93 (4)

Pages

1343-1359

Language

en

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