Jul 29 2007

Who Uses Credit Unions?

Who Uses Credit Unions, Fourth Edition by Filene Fellow Jinkook Lee, segments credit union and bank users into five categories. Lee uses the most recent information based upon the Federal Reserve Board]s database of consumer finances. The study provides updated data on age, income, wealth, education, occupation, race, ethnicity, gender, marital status, and geographic characteristics of heavy, light and non-users of U.S. credit unions.

The author divided U.S. households into five categories: (1) those that use neither banks nor credit unions, (2) those that use credit unions but not banks, (3) those that use banks but not credit unions, (4) those that use both banks and credit unions but mostly credit unions, and (5) those that use both but mostly banks.

The least affluent group of households uses neither a bank nor a credit union. The next least affluent group uses credit unions only. Households using banks but not credit unions are more affluent in terms of income, financial wealth, and total wealth. Many families with relatively high incomes use both banks and credit unions. Households that use mostly banks but are also credit union members are more affluent than households that use mostly credit unions. Those that use mostly banks have, on average, higher incomes, financial wealth, and total wealth than any of the other four groups.

This report helps credit unions to understand that the reasons people choose and use financial institutions are varied and complex. Understanding patterns and trends in the use of financial institutions is essential from both the business and public policy perspectives. As credit union’s toolbox of insights continues to grow, so will the industry’s ability to develop products that effectively meet the needs of potential members.