SAN FRANCISCO — Larger credit unions have been faster growing over the last couple of decades which has helped lower their non-interest expenses while boosting industry consolidation.
"By various measures, larger credit unions have recently had stronger financial performance than smaller credit unions, indicating that these institutions face large and pervasive economies of scale," the Federal Reserve Bank of San Francisco stated in its Aug. 4 FRBSF Economic Letter.
The report calls the performance difference "long-running" and states that the gap is widening. "Thus, it is not surprising that the number of smaller institutions has been shrinking, while the number of larger institutions has been rising," according to the FRBSF. The data provided showed the number of credit unions under $100 million in assets dropping from 17,132 in 1980 to 7,859 as of 2004 while credit unions over $1 billion increased from two to 98.
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