Credit Unions Beat Banks in Weathering Tough Times, Says Study
Even in the middle of recessions and the unemployment and foreclosures that come with them, credit unions have proven that they can weather downturns.
That’s according to a new report from the Filene Research Institute, “Commercial Lending During the Crisis: Credit Unions vs. Banks,” which revealed that credit unions’ aggregate loan portfolios appeared to be about 25% less sensitive to macroeconomic shocks than those of banks.
“If the economy needs as much kindling as possible, shouldn’t credit unions be able to help?” asked Ben Rogers, Filene research director. “Opponents of the loosened standards argue that increasing credit unions’ ability to lend to businesses goes against their historical mandate and should threaten their tax-exempt status, arguments that are beyond the scope of this report.”
An analysis of Call Report data between 1986 and 2009 from banks and credit unions showed that the most conservative estimates suggested credit union loan portfolios appeared to be about 25% less sensitive to macroeconomic shocks than bank loan portfolios.