The current recession and changes in the regulatory climate continue to have a profound impact on the credit union trend toward mergers. Competency in managing the process now and in the future becomes paramount, a new Filene Research Institute study issued today concluded.
"Credit union mergers are unlikely to fade away in the foreseeable future," forecast Filene Chief Research Officer George A. Hofheimer in the report. He noted, however, that the pace of CU consolidation will increase creating "a more intense internal environment."
The Filene study, "Characteristics of Credit Union Mergers: 1984-2008," noted that 12,485 credit union mergers took place during 1971-2008, or 2.3% of credit unions per year, accounting for most of the reduction in the number of credit unions from its peak of 23,866 in 1969 to 8,147 in 2008.
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Separately, Filene issued findings of a second research study on the competitive effects of bank Subchapter S loan rates as they relate to CU products. The study, "A Comparison of Bank and Credit Union Pricing; Implications for Tax Benefits of Subchapter S Incorporation," found that while higher deposit rates benefit the bank's Sub S customers, the pricing tactic is offset by loan rates "higher than Sub C corporate banks and CUs."
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