The impact of interest rate policy on credit union lending during a crisis period

We exploit the variation in the exposure to the Covid-19 pandemic of US states as a quasi-natural experiment to examine the impact of interest rate policy on credit union lending. We find that the interest rate cut can only enhance credit union lending in states that are less affected by the Covid-19 pandemic whilst hampering credit union lending in more affected states. This result is consistent across a number of robustness tests.