How Massive are the Largest Banks as Compared to Credit Unions?
It will probably take a while before we know how many deposits were moved from the big banks to the credit unions due to the Bank Transfer Day campaign. The official Bank Transfer Day was Saturday November 5th, but the momentum will likely continue. Reports last week noted that "650,000 new members transferred a total of $4.5 billion in funds into new credit union savings accounts in the month leading up to Bank Transfer Day."
I've seen some in the news media express concerned about how Bank Transfer Day could create a bank run. I was surprised to hear concerns. Not everyone may be aware of the massive size of the big banks. Banks still hold the vast majority of deposits. According to the Wall Street Journal "Credit unions held just 8% of federally insured deposits as of June 30, compared with 70% for banks that have assets of more than $10 billion." A WSJ chart shows that the total deposits of all credit unions are just over $800 billion. As a comparison, the deposits of banks are just under $10 trillion ($10,000 billion).
I thought it would be informative to review the sizes of the largest banks and credit unions. In the two tables below I've listed the largest 20 U.S. banks and credit unions. They are ranked by deposits.
To show how massive the megabanks are, I graphed the deposit size of the four largest banks and the total combined deposits of the largest 20 credit unions. The deposits of the 20 largest credit unions added together equal $149 billion. The largest bank by deposits is Chase which has $1.18 trillion. This is almost 8 times the size of the combined deposits of the largest 20 credit unions.
Unfortunately, these four megabanks have grown larger since the 2008 the financial crisis. They were too big to fail before the crisis, and now they're even bigger. The size increases were due to their acquisition of banks that had failed or were near failure. Chase acquired Washington Mutual when it failed. Wells Fargo acquired Wachovia when it was near failure in 2008. Bank of America acquired Countrywide Financial and Merrill Lynch.
The large sizes of these four megabanks can be seen in the other large banks. The fifth largest is currently US Bank which has total deposits of about $219 billion. That's about one-fourth the size of the smallest of the big four, Citibank. Note, I'm still keeping Capital One and ING Direct separate since their merger has not yet closed. Once this merger completes, Capital One will be near the size of US Bank.
Largest 20 Banks Based in U.S. by Deposits
|Rank||Bank||State Headquartered||Deposits (in billions)|
|1||JPMorgan Chase Bank||New York||$1,144|
|2||Bank of America||North Carolina||$1,060|
|3||Wells Fargo Bank||California||$887|
|6||The Bank of New York Mellon||New York||$194|
|9||HSBC Bank USA||Virginia||$139|
|10||State Street Bank and Trust Company||Massachusetts||$132|
|13||Branch Banking and Trust Company (BB&T)||North Carolina||$111|
|14||RBS Citizens||Rhode Island||$100|
|16||FIA Card Services||Delaware||$95|
|17||Fifth Third Bank||Ohio||$83|
|20||M&T Bank||New York||$60|
Largest 20 Credit Unions by Deposits
|Rank||Credit Union||State Headquartered||Deposits (in billions)|
|1||Navy Federal Credit Union||Virginia||$32.78|
|2||State Employees' Credit Union||North Carolina||$21.13|
|3||Pentagon Federal Credit Union||Virginia||$12.02|
|4||Boeing Employees Credit Union||Washington||$8.65|
|5||SchoolsFirst Federal Credit Union||California||$7.63|
|6||Alliant Credit Union||Illinois||$6.52|
|7||The Golden 1 Credit Union||California||$6.50|
|8||Security Service Federal Credit Union||Texas||$5.58|
|9||American Airlines Credit Union||Texas||$4.85|
|10||America First Credit Union||Utah||$4.56|
|11||San Diego County Credit Union||California||$4.45|
|12||Suncoast Schools Credit Union||Florida||$4.42|
|13||Citizens Equity First Credit Union||Illinois||$4.10|
|14||Alaska USA Credit Union||Alaska||$4.09|
|15||Star One Credit Union||California||$3.98|
|16||Bethpage Credit Union||New York||$3.78|
|17||Randolph-Brooks Federal Credit Union||Texas||$3.59|
|18||Delta Community Credit Union||Georgia||$3.54|
|19||Vystar Credit Union||Florida||$3.44|
|20||Pennsylvania State Employees Credit Union||Pennsylvania||$3.38|
The above deposits are based on June 2011 data from the FDIC and NCUA websites. Several of these large banks have multiple FDIC charters. The deposits listed in the table are the sum of the deposits from these multiple charters.
If you don't see your bank or credit union listed in the above tables, you can find your institution's size and other financial data using our Bank Health Ratings page. On this page you can find your institution using the search box or at the bottom of this page which has a sortable list of institutions and their Texas Ratios.
See, credit unions were exempted from the Durbin Amendment and as a result the fees they charge retailers accepting their debit cards are now much higher (83%, to be exact) than what banks charge. http://blog.unibulmerchantservices.com/credit-unions-muscle-in-on-big-bank-territory
So we should not be losing sight of the issue that got the whole thing started – the size of the debit interchange fees. It seems to me that the issue is a very simple one. If a fee charged by one bank to a merchant is considered too high, it should also be considered too high if any other bank, or a credit union, charges it to that retailer. I just can't see it any other way and I can guarantee you that merchants see it exactly the way I do.
I think that a lot of people, and economists, would have a problem with that. Why don't we break up IBM, and Wal-Mart...and Microsoft? How about McDonald's and Home Depot? This is a democratic country, and dominant, large companies should be allowed to exist if they obey the laws and regulations. To do otherwise is almost socialistic. But of course, abuses and bail-outs should not happen, no question.
Maybe what I meant to say was "capitalism." In a capitalistic system, large banks or corporations aren't broken up just because they are large or dominant, or to help the "little guys." If Home Depot, for example, runs its business better than smaller competitors, it should be allowed to do so without govt. interference.
Of course, the Canadian banks are also more tightly-regulated than the American banks are. That should be a quid pro quo that we can all get behind.
With securitization, the bank doesn't really care if the loan is paid off early. It's long off their books, perhaps as early as three months after issuing the loan. Who got ****ed by the foregone interest? The pension funds that bought the Asset-Backed Security.