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San Diego State University

Fowler College of
Business Administration

Intellectual Contribution

Title
Credit Unions and Risk
Author(s)
Ely, D.
Type of Research
Peer-Reviewed Journal Articles
Date Published
2014, After July
Contribution Type
Discipline-based scholarship (basic research)
Contribution Category
C
Points
7
Publication Title
Journal of Regulatory Economics
Publisher
Springer
Location
New York, NY
Volume(s)
46
Edition
1
Page Number(s)
80-111
Abstract
The structure of the credit union industry has been transformed by regulatory changes and the subsequent switch by many credit unions to community and multiple-bond fields of membership. This study explores the impact of these trends by testing for differences in risk across credit unions with different field-of-membership types. In tests for differences in risk of bankruptcy and of breaching regulatory standards, risk is found to be greater for credit unions with broader field-of-membership types. These differences in risk appear to derive from greater earnings volatility and lower ROA and net-worth ratios at community and multiple-bond credit unions. These differences in risk decline with greater asset size. Evidence is also presented that credit unions that switched from single-bond institutions to broader field-of-membership types now operate with greater risk.