Who Consumes the Credit Union Subsidies?

Arbeitspapier

We estimate a structural profit model for 956 matched pairs of US credit unions and commercial banks, using the results to examine how the subsidies associated with credit unions' income tax exemptions and non-profit status are allocated across various stakeholders. We find economically large profit inefficiencies at credit unions relative to banks—a little more than half of which is supported by their tax subsidy, but over 90 percent of which is passed through to credit union members as above-market deposit interest rates. Given extensive evidence collected elsewhere that credit union members tend to earn above-average incomes, our results indicate a serious misalignment between the legislation that establishes the credit union mission (a tax exemption in exchange for meeting the credit and savings needs of consumers, especially those of modest means) and the actual performance of credit unions under that legislation.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: QMS Research Paper ; No. 2022/03

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financial Institutions and Services: Government Policy and Regulation
• Thema: Commercial banks ; credit unions ; profit inefficiency ; tax exempt status

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): DeYoung, Robert ; Goddard, John ; McKillop, Donal G. ; Wilson, John O. S.
• Ereignis: Veröffentlichung
• (wer): Queen's University Belfast, Queen's Management School
• (wo): Belfast
• (wann): 2022

Weitere Informationen

• DOI: doi:10.2139/ssrn.3429208
• Handle: http://hdl.handle.net/10419/271258
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ