Federal Reserve Board research finds credit unions have steadily increased their share of US household lending

The Federal Reserve Board published a staff FEDS Note analyzing Financial Accounts data on banks and credit unions, finding that credit unions have expanded their role in providing household credit over the past three decades, particularly in mortgages and consumer credit. From 1990:Q1 to 2024:Q3, credit union loan holdings rose from about 2 percent to about 6 percent of nominal GDP, while US banks’ loan holdings fell from around 48 percent to 40 percent and were more cyclical around the Global Financial Crisis. Consumer credit holdings at credit unions increased from about 1.5 percent to about 2.2 percent of GDP as banks stayed broadly flat (about 7.4 percent to 7.1 percent), and one-to-four family mortgage holdings at credit unions grew from less than 1 percent to about 2.6 percent of GDP as banks declined from about 18 percent in 1990:Q1 to around 10 percent in 2024:Q3 (after peaking above 21 percent in 2006:Q3). The note also documents shifting balance-sheet composition, including higher reserve shares (nearly 9 percent of financial assets at banks and around 6 percent at credit unions as of 2024:Q3), and highlights that consumer credit and one-to-four family mortgages make up about 84 percent of credit union lending as of 2024:Q3; credit union commercial real estate holdings in the Financial Accounts total USD 159 billion as of 2024:Q3, compared with US banks’ holdings that are over an order of magnitude larger.