The Impact of Credit Unions on the Rates Offered for Retail Deposits by Banks and Thrift Institutions

Because of the increasing significance of credit unions as potential competitors for consumer deposits, this paper examines the impact of the market presence of credit unions, variously measured, on the rates for three different types of consumer deposits offered by banks and thrift institutions. In contrast to previous studies, the sample employed covers the nation as a whole, incorporates all large urban areas, and employs survey data on deposit rates for a substantially larger number of institutions than previously employed. Despite circumstance that are argued to militate against the finding of a relationship, regression analyses yield positive coefficients of the measures of credit union presence, with statistical significance in a number of cases