Credit unions and risk

David Ely ()

Journal of Regulatory Economics, 2014, vol. 46, issue 1, 80-111

Abstract: The structure of the credit union industry has been transformed by regulatory changes and the subsequent switch by many credit unions to community and multiple-bond fields of membership. This study explores the impact of these trends by testing for differences in risk across credit unions with different field-of-membership types. In tests for differences in risk of bankruptcy and of breaching regulatory standards, risk is found to be greater for credit unions with broader field-of-membership types. These differences in risk appear to derive from greater earnings volatility and lower ROA and net-worth ratios at community and multiple-bond credit unions. These differences in risk decline with greater asset size. Evidence is also presented that credit unions that switched from single-bond institutions to broader field-of-membership types now operate with greater risk. Copyright Springer Science+Business Media New York 2014

Keywords: Credit unions; Field of membership; Risk; Credit Union Membership Access Act; National Credit Union Administration; G21; G28 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:regeco:v:46:y:2014:i:1:p:80-111

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DOI: 10.1007/s11149-013-9241-8

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