Alternative Measures of Implicitly Priced Financial Services of Savings Institutions and Credit Unions

S AVINGS INSTITUTIONS, credit unions, and commercial banks all offer a generally similar se­ lection of financial services, though each differs in the ability to make certain kinds of loans.1 As a result, many personal sector customers of these institutions would likely be unable to identify any distinguishing characteristics. Indeed, savings institutions and com­ mercial banks sometimes change their charter types (“flip” their charters) without any substantive change in their operations; credit unions may also undergo such a process, and though rare, banks may even con­ vert to credit unions.2 Nevertheless, in the case of a charter flip, the measure of the institution’s output in the national income and product accounts (NIPAs) changes substantially. If a commercial bank becomes a savings institution, for example, the implicitly priced financial intermediation services that had been allo­ cated to borrowers when the institution was chartered as a commercial bank are instead allocated to deposi­ tors. The goal of this article is to determine the extent to which harmonization of the methods used for savings institutions, credit unions, and commercial banks would alter the picture of the production and con­ sumption of implicitly priced financial services in the United States. To this end, the paper develops methods for measuring the output of savings institutions and credit unions (referred to as “nonbank depository in­ stitutions”) that are similar to those already used for commercial banks. It should be noted that no time line for bringing the methods outlined in this paper into the NIPAs has been established; this paper is merely meant to illustrate the sort of revisions that could re­ sult if methods like those now used for commercial bank were to be implemented.