#2347. Financial institution objectives and auto loan pricing: Evidence from the survey of consumer finances

August 2026publication date
Proposal available till 30-05-2025
4 total number of authors per manuscript3510 $

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Journal’s subject area:
Economics, Econometrics and Finance (all);
Sociology and Political Science;
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Abstract:
Prior studies of interest rate differentials between credit unions and commercial banks suffer from selection bias since they rely on data at the level of the financial institution or branch which cannot account for demand-side or loan-level characteristics. We improve on these studies by using household- and loan-level data from the Federal Reserves Survey of Consumer Finances from 20XX to 20XX. We find that, on average, households that receive auto loans from credit unions pay 0.70 percentage points less on interest rates for new vehicles—and 1.40 percentage points less on used vehicles—relative to observably similar households that receive auto loans from banks. The aggregated savings to credit union members is larger than the estimated value of the credit union corporate income tax exemption. Nonetheless, the benefit from lower auto loan rates is likely an underestimate of the true value to consumers of credit unions presence in the market.
Keywords:
auto loans; banks; consumer welfare; cooperatives; credit unions; tax regulation

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