Advertising Expenditures in U.S. Manufacturing Industries, 1967 and 1982

Marketing,

The Effect of Captial Ratios on Credit Union Rates Nationwide

The average net worth ratio of credit unions has increased substantially over the past twenty years. During this time period, there has been a little pressure by the National Credit Union Administration (NCUA) to increase this ratio. The average net worth ratio of credit unions has increased significantly since 1985 to well beyond the well-capitalized ratio of 7 percent. Much of this increase came in the early 1990's, when falling interest rates, due to an easy monetary policy, helped increase net income for depository institutions.With the average net worth ratio at around 11.4 percent in 2007, how high this ratio should be has continued to be an issue. There are two basic arguments that credit unions should maintain a lower net worth. First, since credit unions are cooperatives, any retained earnings greater than what is needed, given their risks, should go back to the credit union members. Second, credit unions may have to restrict growth if they try to maintain a higher net worth ratio than what is needed. However, adequate net worth is needed to maintain credit union soundness and to protect against interest rate risk and credit risk.

Factors Determining Credit Union Loan Rates in Local Markets

This study uses a variant of the structure-performance model, often used in banking studies, to examine the credit union industries in Idaho and Montana. This should be of interest since credit unions have recently been the fastest growing type of depository institution. The used vehicle loan rate is the dependent variable. We found that credit union size, a proxy measure of economies of scale, and bank market share had negative and significant effects on loan rates. Credit union charge-offs, three-firm concentration ratios, higher salaries and a measure of credit union inefficiency led to significantly higher rates.

The Influence of Credit Unions on Bank CD Rate Payments

Historically, banks in the U.S. were the only depository institution that could offer checking deposits. They also tended to specialize in commercial lending, while thrifts (S&L's and mutual savings banks) tended to specialize in home mortgage lending and credit unions tended to specialize in consumer lending. Since 1980, the powers of these depository institutions have became more similar, due to legislation and regulatory changes. Consequently, credit unions have been increasingly in more direct competition with banks and thrifts.Because credit unions are cooperatives, if they can operate efficiently, they should have overall better interest rates than banks on both deposits and loans since they do not pay out dividends to stockholders. Credit union advocates and consumer groups have also argued that the credit union industry provides competition that also benefits banks customers. But, it has only been since December 2000 that any articles have shown in the peer-reviewed economic literature that indeed credit union competition with banks does in fact also benefit bank customers. This paper uses the regression estimates from two such studies to estimate the benefit in certificates-of-deposits (CDs) payments to bank customers that results from credit union competition. Of course, this implies that this benefit is a transfer from the bank stockholders to the bank customers.

Risk-based loan pricing consequences for credit unions

© 2018 Elsevier B.V. Risk-based pricing, in which interest rate offers vary according to individual borrower risk levels, has been increasingly used to price credit union loans in the United States. The key question examined in this research, given credit union not-for-profit objectives, is whether this pricing strategy increases the availability of loans, particularly for high-risk borrowers. Data on the number of loans per credit union member and loan delinquency rates are used to assess loan access and average risk-levels, respectively. The results indicate that risk-based pricing adopters increase the availability of loans relative to otherwise similar non-adopters. However, average risk levels, as measured by delinquency rates, appear to be somewhat lower for adopters of risk-based pricing compared to matched non-adopters. This suggests that lending increases primarily for low-risk borrowers, which contrasts with claims that risk-based pricing chiefly benefits high-risk borrowers who might otherwise be denied credit

Credit union loan rate determinants following the 2008 financial crisis

© 2014 Western Social Science Association. Previous studies show that a variety of institutional and market variables influence cross-sectional variation in the interest rates that credit unions charge on loans. This study examines the behavior of loan interest rates using nationwide credit union data for the fourth quarter of 2009 in the United States. Results from this sample of more than 6,700 individual credit unions corroborate earlier research indicating that credit union competition tends to suppress loan rates and that economies of scale exist at these financial intermediaries. In contrast to prior studies, however, credit unions with higher net worth ratios are found to charge higher interest rates on loans

The economics of advertising: Where's the data?

Advertising, product differentiation, manufacturing industries,