IS THERE A CREDIT UNION DIFFERENCE? COMPARING CANADIAN CREDIT UNION AND BANK BRANCH LOCATIONS

Abstract

This study of credit union and bank branch locations and neighbourhoods in Canada seeks to discover if there is a distinct credit union niche. We find that credit union branches are over-represented in rural areas, and under-represented in large population centres relative to bank branches. Additionally, credit unions are overrepresented in middle-income areas and underrepresented in high-income areas compared to bank branches both at the national level and in all provinces where differences are statistically significant. While both credit unions and banks cater to marginalized communities, the type of marginalized communities they cater to distinguishes them. Making use of the Canadian Marginalization Index, we find credit union branches in Canada to be overrepresented in communities marginalized along the dimensions of material deprivation and dependency, while bank branches are overrepresented in communities marginalized along the dimensions of residential instability and ethnic concentration.