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Banking Conditions

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The dominant trend in the consumer loan market is toward securitized loans (loans that are packaged and sold off as securities). Their market share jumped from 9.52% to 30.51% in the last decade. However, the decline in the market share of large commercial banks may give an inaccurate impression because the data are based on balance sheets after securitized assets are taken off the originating bank’s books. We would obtain a more precise picture by assigning to each institution its share in the pool of securitized assets, but unfortunately, we lack this information. Still, we note that although banks control a larger share of the consumer loan market than do credit unions, this is not true across all bank sizes. In fact, the market share of small banks (those with total assets under $100 million) is smaller than that of credit unions. Moreover, the Supreme Court ruling of February 1998, which capped credit unions’ expansion by limiting their membership pool, does not seem to have affected their performance or their presence in the consumer lending market.

Suggested citation: "Banking Conditions," Federal Reserve Bank of Cleveland, Economic Trends, no. 00-11, pp. 17-19, 11.01.2000.

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