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CREDIT UNION TO MUTUAL CONVERSION: DO INTEREST RATES DIVERGE?
Author(s) -
HEINRICH JEFF,
KASHIAN RUSS
Publication year - 2008
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.2007.00055.x
Subject(s) - interest rate , loan , net interest income , payment , salary , economics , credit union , market liquidity , monetary economics , business , financial system , finance , market economy
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)