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Journal Article
Serving the unbanked : La Cooperativa educates members
Journal Article
A bank by any other name
Working Paper
Are credit unions too small?
Since 1985, the share of U.S. depository institution assets held by credit unions has nearly doubled, and the average (inflation-adjusted) size of credit unions has increased over 600 percent. We use a non-parametric local-linear estimator to estimate a cost relationship for credit unions and derive estimates of ray-scale and expansion-path scale economies. We employ a dimension-reduction technique to reduce estimation error, and bootstrap methods for inference. We find substantial evidence of increasing returns to scale across the range of sizes observed among credit unions, suggesting that ...
Journal Article
Small banks' competitors loom large
Journal Article
Credit unions and the common bond
A distinguishing feature of credit unions is the legal requirement that members share a common bond. This organizing principle recently became the focus of national attention when the Supreme Court and the U.S. Congress took opposite sides in a controversy regarding the number of common bonds (fields of membership) that could coexist within a single credit union. In this article, Emmons and Schmid develop and simulate a model of credit-union formation and consolidation to examine the effects of common-bond restrictions on the performance of credit unions. The performance measures are ...
Journal Article
Credit union issues
In February 1998 the U.S. Supreme Court partially settled a long-running controversy about the concept and extent of common bond limits on credit union membership, interpreting the Federal Credit Union Act as limiting membership to individuals sharing a single common bond. The ensuing debate has extended, quite naturally, to credit union tax status. Meanwhile, the U.S. House of Representatives and Senate have overwhelmingly passed and the President has signed a bill that would substantially annul the Supreme Court decision. ; This article attempts to provide a basis for thinking about current ...
Working Paper
Banks vs. credit unions: dynamic competition in local markets
One interesting aspect of the financial services industry is that for-profit institutions such as commercial banks compete directly with not-for-profit financial intermediaries such as credit unions. In this article, we analyze competition among banks and between banks and credit unions using a dynamic model of spatial competition. The model allows for the co-existence of (for-profit) banks and (not-for-profit) credit unions. Using annual county-level data on banking market concentration and credit-union participation rates for the period 1989-96, we find empirical evidence of two-way ...
Journal Article
Membership structure, competition, and occupational credit union deposit rates
How do occupational credit unions set deposit rates? This article shows that the answer to this question will depend on (i) who actually makes business decisions in credit unions (who is in control), and (ii) whether local deposit market competition is important. It is not obvious who controls occupational credit unions. If the sponsor (the employer) is in control, then loans and deposits are priced to maximize the surplus received by all of the credit union?s current and potential members (those eligible to join). If members are in control, then a group of members with a majority can ...
Journal Article
Bank competition and concentration: do credit unions matter?
One interesting aspect of the financial services industry is that for-profit institutions, such as commercial banks, compete directly with not-for-profit financial intermediaries, such as credit unions. In this article, William R. Emmons and Frank A. Schmid analyze the competition between banks and credit unions. Using annual county-level data on banking-market concentration and household participation rates at occupational credit unions for the period between 1989 and 1996, the authors find empirical evidence of two-way competitive interactions between banks and credit unions.