Banking on the Firm Objective

59 Pages Posted: 24 Aug 2018 Last revised: 7 Feb 2020

See all articles by Anna Cororaton

Anna Cororaton

United States Energy Information Administration

Date Written: October 1, 2019


In the U.S., credit union lending grew by 15 percentage points more relative to commercial bank lending after the Great Recession. Comparing institutions that faced similar borrowers within narrowly-defined local credit markets and similar crisis exposures shows the effect is supply-driven. Balance sheet mechanisms, loan pricing, informational advantages, tax benefits, and regulation do not explain results. Rather, higher lending was sustained by lower profit margins. Results suggest member-oriented firm objectives that prioritize the provision of financial services led the $1.4 trillion dollar credit union industry to lend more relative to profit-maximizing banks.

Keywords: Financial intermediation, Credit unions, Household finance

JEL Classification: D22, G01, G21, L21, L33, P13

Suggested Citation

Cororaton, Anna, Banking on the Firm Objective (October 1, 2019). Available at SSRN: or

Anna Cororaton (Contact Author)

United States Energy Information Administration ( email )

1000 Independence Ave., SW
Washington, DC 20585
United States

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