scholarly journals Bridging the Gap? Government Subsidized Lending and Access to Capital

2013 ◽  
Vol 2 (1) ◽  
pp. 98-128 ◽  
Author(s):  
Kristle Romero Cortés ◽  
Josh Lerner
Keyword(s):  
Community Development ◽  
Financial Institutions ◽  
Regression Discontinuity ◽  
Financial Institution ◽  
Credit Unions ◽  
Credit Union ◽  
First Year ◽  
Public Funds ◽  
Union Activity

The consequences of providing public funds to financial institutions remain controversial. We examine the Community Development Financial Institution (CDFI) Fund’s impact on credit union activity, using hitherto little studied U.S. Treasury data. The CDFI Fund grants increase lending at credit unions by 3%. For every dollar awarded, 45 additional cents are loaned out to borrowers in the first year, and up to an additional $1.60 is loaned out within three years. Delinquent loan rates also increase slightly. Our panel results are supported by a broadband regression discontinuity analysis. Politics does not seem to play a role in allocating funding. (JEL G28)

Income structure, diversification strategy and owners’ benefit in cooperative financial institutions

2020 ◽  
Vol 16 (4) ◽  
pp. 481-500
Author(s):  
Hoang Van Cuong ◽  
Hiep Ngoc Luu ◽  
Loan Quynh Thi Nguyen ◽  
Vu Tuan Chu
Keyword(s):  
Financial Institutions ◽  
Credit Unions ◽  
Credit Union ◽  
Least Square ◽  
Policy Implications ◽  
Diversification Strategy ◽  
Income Diversification ◽  
Significant Drop ◽  
Content Type ◽  
Common Bond

PurposeThe purposes of this paper are twofold. First, it analyses the income structure in cooperative financial institutions and examines how traditional and non-traditional incomes are related. Second, it evaluates whether increasing diversification towards non-traditional incomes facilitates or hampers the benefits of financial cooperative owners.Design/methodology/approachData are collected from over 3,100 US credit unions over the period of 1994–2016. A number of modern econometric techniques are employed throughout the analysis, including the use of panel fixed effect, generalised method of moments (GMM) and two-stage least square (2SLS) methodologies.FindingsUsing US credit unions as the empirical setting, the empirical results reveal that the expansion of traditional income leads to a corresponding increase in income from non-traditional activities. However, an increasing reliance on non-traditional income causes a significant drop in interest margins. The authors also find that the extent to which income diversification affects owner benefit varies across credit union types and period of time. While income diversification negatively affects owners' benefits in single common bond credit unions, it has no significant influence on multiple common bond and community credit union owners' benefits. Third, diversification can be beneficial during crisis time, but can be detrimental to owner benefit during normal time.Originality/valueThis paper provides some of the first empirical investigations on the diversification strategy of cooperative financial institutions. Therefore, the results offer significant policy implications for policymakers and market participants on whether financial cooperatives should diversify or specialise.

scholarly journals Decisions in Finance Management at Polish Financial Institutions - Credit Unions and the National Credit Union

Ekonomika ◽  
2007 ◽  
Vol 80 ◽  
Author(s):  
Leszek Kędzierski
Keyword(s):  
World War Ii ◽  
Financial Institutions ◽  
Credit Unions ◽  
Credit Union ◽  
Present Moment ◽  
Internal Factors ◽  
Investment Activity ◽  
Financial Decisions ◽  
Finance Management ◽  
The 19Th Century

Crediting financial institutions (financial co-operatives) on Polish territories began functioning in the 19th century. They performed duties also in the period of the 2nd Republic of Poland. After World War II, credit unions were subjected to various organizational transformations. Their regeneration in Poland took place early in the 1990s in the shape of the credit unions. The non-banking financial institutions in Poland - credit unions and the National Credit Union - take investment and financial decisions. These decisions deal with finance management. Investment decisions are not a uniform category. One can group them on various bases. The credit unions and the National Credit Union may take up various attitudes towards the investment risk. Financial decisions are determined by operational and investment activity of the mentioned financial institutions. The scope of investment and financial decisions of credit unions and the National Credit Union is different. There are external and internal factors, as well as mixed internal-external factors influencing at the present moment the investment and financial decisions of credit unions and the National Credit Union. Future changes within the investment and financial decisions of credit unions and the National Credit Union in Poland may be determined, among other factors, by the accepted model of development of these financial institutions (Model of QuantityQuality Changes - MQQC or Banking Model - BM).

Who Could We Blame? The Impact of Strategic Orientations on the Failure of Financial Institutions

2021 ◽  
pp. 2150011
Author(s):  
Xuan Vinh Vo ◽  
Tuan Quoc Le ◽  
Thi Lam Anh Nguyen ◽  
Hiep Ngoc Luu
Keyword(s):  
Financial Institutions ◽  
Failure Probability ◽  
Operating Experience ◽  
Credit Unions ◽  
Credit Union ◽  
Operational Strategies ◽  
Strategic Orientations ◽  
The Us ◽  
Interest Margins ◽  
The Impact

We evaluate the impact of strategic orientation on the failure probability of financial institutions. Using the US credit union industry as the empirical setting, we find that credit unions which exhibit preferential treatment to borrowers are more likely to fail, whereas those who set operational strategies towards balancing the benefits between savers and borrowers experience a lower failure probability. The impacts appear to be more pronounced in small credit unions and in credit unions which have a lower operating experience. We also find that borrower-oriented credit unions generate lower interest margins while neutral behavior credit unions generate higher margins.

A methodology for enterprise-wide risk assessment in small banks and credit union

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Philippa Duncan
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Money Laundering ◽  
Financial Institutions ◽  
Rapid Evolution ◽  
Credit Unions ◽  
Credit Union ◽  
Content Type ◽  
Financial Crimes ◽  
Compliance Program

Purpose This paper aims to provide an easy to follow, practical guide for small traditional banks and credit unions to conduct an enterprise-wide risk assessment of the financial institution’s anti-money laundering compliance program. Design/methodology/approach Information was collected from relevant documents published by global standard setters in the disciplines of anti-money laundering, financial crime prevention and risk management. The data was integrated with common challenges experienced by small financial institutions to produce an application-based guide that practitioners can readily implement. Findings Though not a new concept, macro-level financial crises and institutional level financial crimes have influenced the rapid evolution of risk management in financial institutions over the past three decades. Small unsophisticated banks and credit unions are expected to now perform an internal risk assessment. An abundance of information is available on risk assessment, but small institutions remain challenged in finding a turnkey document that is readily actionable to stimulate a less arduous undertaking, especially given the institutions’ limited resources. Research limitations/implications The setting reflects small deposit-taking institutions with traditional services. It is tailored for easy understanding and practical use by the institutions. Originality/value This could influence small institutions to conduct enterprise-wide risk assessments and formulate and use more specific risk management policies.

scholarly journals KAJIAN PENGELOLAAN DANA KOPERASI SIMPAN PINJAM KONVENSIONAL DI KOTA SEMARANG

2017 ◽  
Vol 18 (1) ◽  
pp. 133
Author(s):  
Sri Purwantini ◽  
Endang Rusdianti ◽  
Paulus Wardoyo
Keyword(s):  
Financial Institution ◽  
Credit Unions ◽  
Credit Union ◽  
Loan Portfolio ◽  
The Past ◽  
Time Deposits ◽  
Study Results ◽  
Linkage Program

<p><em>In accordance with the principles of cooperatives, Credit Union known as financial institution, as well as serve as an intermediary institution. Credit Unions activities include collecting deposits from members, gives loans to members, other cooperatives and or their members, as well as manage the balance of funding and lending.</em></p><p><em>Based on the study results, it is found that Credit Unions can not rely on collection of funds from the member either in the form of savings, compulsory savings, time deposits. In addition, Credit Unions are also less interested in establishing a partnership with the Bank either through the linkage program and other programs.</em></p><p><em>In an effort to balance of fund and loan portfolio, the manager of more use their experiences in the past, so that utilization is less than optimal. Weak regulation, has made the behavior of the manager of Credit Unions to act like a bank.</em></p><p> </p>

The Effect of Common Bond on Credit Union Performance: The Case of Black-Controlled Credit Unions

1987 ◽  
Vol 15 (4) ◽  
pp. 89-98 ◽  
Author(s):  
Harold A. Black ◽  
Robert L. Schweitzer
Keyword(s):  
Economic Development ◽  
Financial Institutions ◽  
Credit Unions ◽  
Credit Union ◽  
Institutional Characteristics ◽  
Common Bond ◽  
Black Economic ◽  
Black Economic Development ◽  
Financial Characteristics ◽  
Unique Relationship

This article compares the financial characteristics of black-controlled credit unions by type of common bond. The study found that many of the operational differences of these credit unions can be attributed to institutional characteristics associated with the three distinct types of credit unions. It also found that black credit unions are viable financial institutions, regardless of type of common bond. This finding is linked to the ownership of credit unions by its membership. This unique relationship has implications for black economic development.

scholarly journals Activity evaluation of Lithuania credit unions

2014 ◽  
pp. 118-132
Author(s):  
Deimena Kiyak ◽  
Laura Paulionienė
Keyword(s):  
Performance Evaluation ◽  
Foreign Currency ◽  
Scientific Literature ◽  
Financial Institution ◽  
Stock Exchange ◽  
Credit Unions ◽  
Credit Union ◽  
Capital Adequacy ◽  
Comparative Performance ◽  
Exponential Trend

The bank of Lithuania in its supervisory functions evaluates how credit unions carries out the prudential norms (capital adequacy, liquidity, maximum open position in foreign currency, the maximum loan amount per borrower, large loan requirements), examine the overall financial condition of the credit union, is watching whether the credit union's activities comply with laws, regulations, statutes and internal union document requirements. However, the steady growth of the credit union's capital, loan number and size of credit unions operating regulations limiting still does not measure the credit union's business risk profile and operational efficiency, protect against failures, errors or loss. The analysis of scientific literature also shows that there is no unanimous and undisputed methodology for enterprises performance evaluation. Moreover, there is no company's evaluation models adapted to specifically interested persons group and one to of the financial institutions, i.e. credit unions. Therefore, performance evaluation of credit union and prediction research of their financial parameters in this area is valuable, relevant and new, in both theoretical and practical terms. The aim - to perform Lithuanian credit unions comparative performance evaluation. The scientific literature suggests that credit unions' assessment can be carried out both traditional (dynamics, structure, relative indicators, business continuity) and the innovative modern methods. It should be emphasized that the evaluation of the activities is individual for each business enterprise, because it depends on many factors, such as: object of assessment, the assessment purpose; the assessment period; assessment of the required information and the availability of data, the evaluation period, the users of evaluation results and other. It should be noted that the main users of credit unions performance assessment results are the owners (partners), creditors and future owners and lenders and borrowers. According to the Securities stock exchange NASDAQ OMX Vilnius (2010) proposed financial ratios calculation methodology were calculated and compared 76 credit unions operating in Lithuania profitability, efficiency, and financial leverage ratios. By using linear and exponential trend methodology analysed the mean trends of Lithuanian credit unions key performance indicators. It should be noted that setup of complex financial indicators, tailored specifically to the financial institution with the opportunity to compare it with other relevant authorities of the credit unions' assessment and performance expected.

Value proposition preferences of credit union members and patronage activity

2014 ◽  
Vol 32 (6) ◽  
pp. 567-589 ◽  
Author(s):  
Noreen Byrne ◽  
Olive McCarthy
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Credit Unions ◽  
Credit Union ◽  
Value Proposition ◽  
Content Type ◽  
Relational Value ◽  
Emotional Value ◽  
The Impact ◽  
The Relationship

Purpose – The purpose of this paper is to examine the technical and relational value proposition preferences of credit union members and to examine the relationship between their preference and patronage activity. Design/methodology/approach – A total of 800 members of credit unions were surveyed. Exploratory factor analysis was used and four factors were extracted incorporating technical and relational dimensions of the credit union service. Member value proposition preferences are examined and the relationship to patronage activity of the credit union was explored. Findings – The majority of members express a higher or equal preference for a relational rather than a technical value proposition. Those that express a greater or equal preference for relational value are more likely to have a higher level of patronage activity. Research limitations/implications – Credit unions are member-owned financial institutions and hence the study is context dependent. Credit unions are member-owned financial institutions and hence relational value may be more significant than in the case of non-member owned entities. Practical implications – The research highlights the importance of consideration of relational value in financial services entities whose competitive advantage lies in the relational. In terms of the credit union, the impact on the relational value proposition of the credit union must be considered in the design and implementation of industry restructuring. Originality/value – This paper extends the emotional value and interactive quality construct to incorporate a greater relational focus which the paper suggests is of greater relevance to high-contact financial services. The research in this paper also extends beyond the criticised static focus of consumer perceived scales (consumer perceived value) and the episode focused service quality scales. Hence, it has a more longitudinal and holistic focus. The paper also incorporates a preference between benefits approach rather than an evaluative or trade-off between benefits and costs framework.

scholarly journals The Bank and Credit Union Disasters in Lithuania: Where Were the Lawyers?

2014 ◽  
Vol 7 (2) ◽  
pp. 77-94 ◽  
Author(s):  
Julija Kiršienė
Keyword(s):  
Comparative Analysis ◽  
Financial Institutions ◽  
Comparative Research ◽  
Legal Profession ◽  
Credit Unions ◽  
Credit Union ◽  
Corporate Lawyers

ABSTRACT Since Lithuania’s independence in 1991, sixteen banks in the country have gone bankrupt. From 2011 to 2013 two banks-the fifth and sixth largest banks in the country- went bankrupt and three credit unions collapsed. One more credit union collapsed in 2014. One of the questions not yet posed in the context of this crisis of financial institutions in Lithuania is the question: “Where were the lawyers?” This article focuses on a comparative analysis of the regulation and practice of the legal profession in considering whether and how outside and inside bank and corporate lawyers can be effective gatekeepers, foreseeing, preventing, and mitigating such collapses. This comparative research concludes with propositions for changing legal profession regulations as well as lawyers’ and corporate officers’ education.

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