Does Rocky Mountain Credit Union Competition still Affect Commercial Bank Interest Rates?

Thomas Fullerton (), Robert J. Tokle, Bryce Jones and Steven Fullerton
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Robert J. Tokle: Department of Economics, Idaho State University, Pocatello, USA
Bryce Jones: Colorado Office of Economic Development & International Trade, Denver, USA

Journal of Regional Economics, 2023, vol. 2, issue 1, 42-52

Abstract: Historically, increased credit union competition in Idaho and Montana has caused commercial banks to offer higher deposit rates to savers and lower loan rates to borrowers. Data are collected for the second quarter of 2018 to examine whether that pattern still holds true. Unlike prior studies, empirical results indicate that credit union competition no longer exerts statistically reliable impacts on deposit rates or loan rates in this northern Rocky Mountain region of the United States. Potential contributing factors include bank and thrift consolidation in recent years, the low interest rate environment prevailing during the late 2010s, and greater emphasis on non-interest forms of intermediary competition in the banking markets that comprise this regional economy.

Keywords: Regional banking; Interest rates; Financial intermediary competition (search for similar items in EconPapers)
Date: 2023
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