Credit Unions: A Theoretical and Empirical Overview (original) (raw)

Can mergers ensure the survival of credit unions in the third millennium

Journal of Banking & Finance, 2001

The survival of small ®nancial institutions in the third millennium depends on their competitiveness against large bank rivals. Accordingly, credit unions in Australia and the United States have attempted to increase eciency through mergers. Our paper uses the data envelopment analysis methodology to evaluate the post-merger gains in technical and scale eciency achieved by 31 Australian credit union mergers in 1993/1994 and 1994/1995, relative to non-merging credit unions. When compared with the only US study of credit union mergers [Journal of Banking & Finance 23 (1999) 367±386], our ®ndings suggests that mergers are not associated with improvements in eciency superior to those achieved by internal growth. Ó 2001 Published by Elsevier Science B.V.

Drivers of credit union penetration: An international analysis

Managerial and Decision Economics, 2020

We investigate the drivers of credit union penetration with data from 90 countries for the period 2005-2017. Generally, the results show that the number of credit unions, the level of financial development of a country, the level of industrialization of a country, and the institutional environment are significantly supportive of credit union penetration. We conclude that the elimination of restrictions on the formation of credit unions (if any), the adoption of industrialization as development path, the implementation of sound monetary and fiscal policies that promote financial development , and the pursuit of good public governance are crucial for credit union penetration.

Consolidation of the Financial Services Industry: Implications for Credit Unions

1999

The effect of mega-banks on credit unions has become an increasingly compelling issue as financial services consolidation continues to accelerate. To address this issue, the Filene Research Institute; the Center for Credit Union Research, University of Wisconsin-Madison; Graduate School of Business, Stanford University; and Stanford Federal Credit Union jointly sponsored a colloquium, held at Stanford University in March 1999.

The impact of mergers on credit union service provision

Journal of Banking & Finance, 1999

In this paper we conduct an empirical exercise in which we attempt to provide answers to three questions concerning credit union mergers: (i) do members of acquiring credit unions bene®t from mergers?; (ii) do members of acquired credit unions bene®t from mergers?; and (iii) what are the characteristics of relatively successful, and relatively unsuccessful, mergers? Our empirical exercise is based on annual samples of nearly 6000 credit unions, including nearly 300 merger participants, during the 1988± 1995 period. We ®nd member service provision to have improved in acquired credit unions, and to have been unchanged in acquiring credit unions. We also provide three separate analyses, from three dierent perspectives, of the role of various characteristics of merging credit unions in determining the success of mergers. Ó 1999 Elsevier Science B.V. All rights reserved. JEL classi®cation: G21; G34 0378-4266/99/$ ± see front matter Ó 1999 Elsevier Science B.V. All rights reserved. PII: S 0 3 7 8 -4 2 6 6 ( 9 8 ) 0 0 0 9 0 -9

US credit unions: An empirical investigation of size, age and growth

Annals of Public and Cooperative …, 2005

An econometric analysis of the growth performance of US credit unions for the period 1992-2001 investigates empirical relationships between size, age and growth. Ceteris paribus larger credit unions grew faster than smaller unions. State credit unions grew faster than federal credit unions, and single bond credit unions grew faster than multiple bond credit unions. The size-growth gradients were generally steeper for state than for federal credit unions, and for single bond than for multiple bond credit unions. These patterns are attributed to variations in legislation and regulatory treatment. There is some evidence that younger credit unions tended to outgrow older ones. This seems consistent with a life cycle typology of credit union growth and development. There is also evidence of a positive persistence of growth effect. The cross-sectional variance of growth is inversely related to size, but is largely independent of age.

U.S. CREDIT UNIONS: SURVIVAL, CONSOLIDATION, AND GROWTH

Economic Inquiry, 2014

This study uses hazard function estimations and time-series and cross-sectional growth regressions to examine the impact of exit through merger and acquisition (M&A) or failure, and internally generated growth, on the firm-size distribution within the U.S. credit union sector. Consolidation through M&A was the principal cause of a reduction in the number of credit unions, but impact on concentration was small. Divergence between the average internally generated growth of smaller and larger credit unions was the principal driver of the rise in concentration. (JEL G21) *The authors are grateful to James MacGee (Editor) and two anonymous referees for many helpful comments on an earlier draft of this paper. We would like to thank Leonard Nakomura, Bob DeYoung, and other participants at the FMA and SFA Annual Meetings in Denver and Charleston for helpful comments and suggestions.

Credit Unions on the Financial Landscape: Geographical Strategies of Expansion and Service

Recent legislative efforts to protect credit unions against unfavorable legislation reflect the growing importance of credit unions in the U.S. financial services sector. Efforts to address new technologies, combined with deregulation in financial services, have led changes in the field of membership rules governing how credit unions are chartered and how they may grow. These regulations have clear geographic implications for defining communities and for offering financial services and education to particular segments of the population. This paper briefly reviews the history of credit unions, then examines the Credit Union Membership Access Act of 1998 (CUMAA) and the National Credit Union Administration's (NCUA) interpretation and implementation. A case study of two Florida locales is used to analyze the changes in credit union charters and their expansion in the rapidly changing market. The results point to the possibility that credit union expansion as currently legislated may be an effective way to insure access to financial services. Keywords:credit union, financial services, community, fields of membership, regulation