Deposit insurance and credit union lending

Linh Nguyen, John Ogilvie Stephen Wilson*, Tuan Le, Hiep N. Luu, Tram-Anh Nguyen, Vinh Vo

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


We exploit an exogenous change in the coverage of insured deposits following the passage of the Emergency Economic Stabilization Act (2008) to investigate the impact of deposit insurance on the volume, composition and quality of credit union lending. Using a difference-in-difference approach, we find changes in the volume, composition and riskiness of credit union lending. Specifically, we find that affected credit unions increase total and unsecured lending, leading to a decline in loan quality. Overall, our results suggest that an increase in the maximum coverage of insured deposits induces credit unions to lend more at the expense of loan quality.
Original languageEnglish
Article number101003
Number of pages16
JournalJournal of Financial Stability
Early online date31 Mar 2022
Publication statusPublished - Jun 2022


  • Deposit insurance
  • Lending
  • Loan quality
  • Credit unions
  • Emergency Economic Stabilization Act


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