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 maximize its own surplus. The group in control may include members whose primary purpose for joining the credit union is to borrow money or, alternatively, to lend money (make deposits). If local deposit-market competition is the dominant influence, then internal characteristics of the credit union won’t matter at all. This study tests the sponsor-> control, the member-control, and the market-control hypotheses against each other using a large sample of occupational credit unions observed in 1997. Our results suggest that sponsors exercise effective control over occupational credit unions.
Volume (Year): (2001)
Issue (Month): Jan ()
|Contact details of provider:|| Postal: |
Web page: http://www.stlouisfed.org/
More information through EDIRC
|Order Information:|| Web: http://www.stls.frb.org/research/order/pubform.html Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- William R. Emmons & Willi Mueller, 1997. "Conflict of interest between borrowers and lenders in credit co- operatives: the case of German co-operative banks," Working Papers 1997-009, Federal Reserve Bank of St. Louis.
- Oliver Hart & John Moore, 1998.
"Cooperatives vs. outside ownership,"
LSE Research Online Documents on Economics
19360, London School of Economics and Political Science, LSE Library.
- Oliver Hart & John Moore, 1998. "Cooperatives vs. Outside Ownership," Harvard Institute of Economic Research Working Papers 1816, Harvard - Institute of Economic Research.
- Oliver Hart & John Moore, 1998. "Cooperatives vs. Outside Ownership," STICERD - Theoretical Economics Paper Series 346, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Oliver Hart & John Moore, 1998. "Cooperatives vs. Outside Ownership," NBER Working Papers 6421, National Bureau of Economic Research, Inc.
- Oliver Hart & John Moore, 2004. "Cooperatives vs. Outside Ownership," ESE Discussion Papers 114, Edinburgh School of Economics, University of Edinburgh.
- William R. Emmons & Frank A. Schmid, 1999.
"Credit unions and the common bond,"
Federal Reserve Bank of St. Louis, issue Sep, pages 41-64.
- Smith, Donald J, 1984. " A Theoretic Framework for the Analysis of Credit Union Decision Making," Journal of Finance, American Finance Association, vol. 39(4), pages 1155-68, September.
When requesting a correction, please mention this item's handle: RePEc:fip:fedlrv:y:2001:i:jan:p:41-50:n:v.83no.1. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anna Xiao)
If references are entirely missing, you can add them using this form.