Mar 06 2015

Cooperation among Cooperatives

Quantifying the Business Case for Credit Unions and Other Cooperatives

Credit unions have many cousins. In 2014, cooperatives’ assets in the United States totaled $1,754 billion (B) including (1) $346 B in non-financial cooperatives, (2) $1,126 B in credit unions, and (3) $282 B in other financial cooperatives that were owned, at least in part, by non-financial cooperatives. Utilities (with $149 B in assets) and farm-related co-ops ($83 B) are, by far, the largest non-financial cooperative sectors. Credit unions and other cooperatives share similar ownership structures and principles of service to their members. Thus, cooperatives’ leaders and media often look for mutually beneficial business collaboration across both sectors. 

Examples of collaboration include (1) cross-promoting membership, (2) sharing physical space, such as locating credit union branches or ATMs at or next to non-financial cooperatives, (3) cross-marketing efforts such as co-branding credit cards, and (4) shifting cooperatives’ current and future deposits and borrowing from commercial banks to credit unions. 

Most evidence of cross sector cooperative collaboration has been anecdotal and qualitative; this report focuses on quantifying several aspects of the potential for cross sector cooperative collaboration. In particular, the report:  

  • Quantifies the sizes of non-financial cooperatives, credit unions, and other financial cooperatives. 
  • Estimates the impacts of shifts of non-financial cooperatives’ deposits and loans on two key credit union regulatory ratios: capital (net worth) per assets and business loans per assets
  • Estimates the interest rate benefits for cooperatives of shifting large fractions of their deposits from commercial banks to credit unions

Filene thanks our generous partners for making this important research possible. 



Report Number 359