Workshop examines academic research on credit union difference

The University of Wisconsin-Madison’s Center for Cooperatives and Northeastern University’s D’Amore-McKim School of Business joined America’s Credit Unions Friday for a workshop highlighting academic analysis on the credit union difference. The workshop also featured a policy panel of industry leaders, featuring America’s Credit Unions’ Mike Schenk.

“Events like this encourage academic research into credit union impact and how consumers experience the transformative power of cooperative finance,” Schenk said. “Banks put significant resources into pro-bank—and anti-credit union—research. This event is one component of America’s Credit Unions’ big-data strategy, designed to leverage limited resources by energizing researchers around differentiating purpose-driven, not-for-profit, and member-owned credit unions. They really are consumers’ best option in financial services. The data we share with academic partners consistently and unambiguously makes that clear.”

Three academic papers were presented as part of the workshop, showing:

  • How Community Development Financial Institutions (CDFIs)—once certified by the Treasury—tend to grow faster and lend more. The paper suggested resources available to certified CDFIs can help alleviate institution-level financial constraints;
  • Student loan borrowers during the COVID-related forbearance period often became more indebted over that period, but credit union members incurred far less debt than non-members (8% increase for credit union members vs. 25-30% increase for non-members; and  
  • Credit unions required to increase capital to meet regulatory requirements improve financial reporting quality through decline in discretionary loan loss provisions.

This was the second workshop held—the first was held in 2019 by CUNA, Filene Research Institute, and University of Wisconsin-Madison—to highlight the credit union difference and the availability of data to back it up. America’s Credit Unions’ Dawit Kebede served on the events organization committee, along with representatives from the two schools.

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