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Credit Union To Mutual Conversion: Do Interest Rates Diverge?




"This study conducts a cross-sectional analysis of 175 depository institutions, assessing the impact on the interest rates charged on loan products and offered on savings products by the size of the institution, its liquidity, its net worth, its tax and salary payments, and its status as a for-profit institution, a credit union (CU), or a converted CU. We find that banks and converted CUs have interest rates significantly less favorable for consumers than CUs, suggesting that a CU converting will result in adverse interest rate movements for its customers. "("JEL "621, L3) Copyright 2007 Western Economic Association International.

Suggested Citation

  • Jeff Heinrich & Russ Kashian, 2008. "Credit Union To Mutual Conversion: Do Interest Rates Diverge?," Contemporary Economic Policy, Western Economic Association International, vol. 26(1), pages 107-117, January.
  • Handle: RePEc:bla:coecpo:v:26:y:2008:i:1:p:107-117

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    References listed on IDEAS

    1. Berger, Allen N & Hannan, Timothy H, 1989. "The Price-Concentration Relationship in Banking," The Review of Economics and Statistics, MIT Press, vol. 71(2), pages 291-299, May.
    2. Robert Tokle & Joanne Tokle, 2000. "The Influence of Credit Union and Savings and Loan Competition on Bank Deposit Rates in Idaho and Montana," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 17(4), pages 427-439, December.
    3. Robert Feinberg, 2002. "Credit Unions: Fringe Suppliers or Cournot Competitors?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 20(2), pages 105-113, March.
    4. Robert M. Feinberg, 2003. "The Determinants of Bank Rates in Local Consumer Lending Markets: Comparing Market and Institution-Level Results," Southern Economic Journal, Southern Economic Association, vol. 70(1), pages 144-156, July.
    5. Fabio Panetta & Dario Focarelli, 2003. "Are Mergers Beneficial to Consumers? Evidence from the Italian Market for Bank Deposits," CEIS Research Paper 10, Tor Vergata University, CEIS.
    6. Dario Focarelli & Fabio Panetta, 2003. "Are Mergers Beneficial to Consumers? Evidence from the Market for Bank Deposits," American Economic Review, American Economic Association, vol. 93(4), pages 1152-1172, September.
    7. Feinberg, Robert M. & Rahman, A. F. M. Ataur, 2001. "A causality test of the relationship between bank and credit union lending rates in local markets," Economics Letters, Elsevier, vol. 71(2), pages 271-275, May.
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    Cited by:

    1. Anne Marie Ward & John Forker, 2017. "Financial Management Effectiveness and Board Gender Diversity in Member-Governed, Community Financial Institutions," Journal of Business Ethics, Springer, vol. 141(2), pages 351-366, March.
    2. Kondo, Kazumine, 2014. "Do Credit Associations Compete with Each Other in Japanese Regional Lending Markets?," MPRA Paper 56669, University Library of Munich, Germany.
    3. Robert Tokle & Joanne Tokle, 2010. "Credit Union Growth in Mid-sized Markets," New York Economic Review, New York State Economics Association (NYSEA), pages 45-56.
    4. Kazumine Kondo, 2017. "Do credit associations compete with each other in Japanese regional lending markets?," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 41(1), pages 195-210, January.

    More about this item

    JEL classification:

    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise


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