CREDIT UNIONS IN THE United States have yet to celebrate their fiftieth birthday. Nevertheless, they have shown rapid growth in the last two decades and have attracted the attention of the banking community, which has become aware of the phenomenal growth of these societies and tends to view them as competitors no longer meriting special subsidy in the way of absorption by others of part of their expenses and exemption from federal income taxes. The present study seeks to trace the development of credit unions, to analyze their current operations, and to assess their place in the financial system. What do they do, and why have they grown so rapidly recently? Since no comprehensive nation-wide data are available, but only earlier studies of the situation in several states, the data used in the detailed analysis relate to federal credit unions, whose origin is as recent as 1934. The analysis of credit unions followed in the present study is centered upon their operations as reflected in balance-sheet and income data. It therefore employs techniques that resemble those of the National Bureau of Economic Research in their studies dealing with financial institutions which extended cash instalment loans to consumers, namely, industrial banking companies, personal finance companies, and personal loan departments of commercial banks, each published in 1940. It may be noted that the fourth principal lenderthe credit union-which represented in 1953 a $2 billion industry, was not included in the series. A credit union is one of a variety of types of specialized financial institutions. Its distinctive features are (1) its co-operative structure, with ownership and democratic control vested in a membership composed of individuals with some pre-existing bond of unity-in practice, chiefly occupation-and (2) its function of providing small loans for provident purposes to its members at rates limited by statute, while encouraging thrift and educating its members in the wise management of their own financial affairs. It originated as an