Bill Hobbs provides some interesting insights into the issues facing Credit Unions in his
What do AAMers think of his contention that CU's face a round of compulsory consolidation?
Not to sure about that - US, Canadian ad Australian credit unions have been consolidating for quite some time.The big danger with consolidation is the possibility of losing the ethos of locallly run CU's. This must be balanced against the possible benefits of consolidation but bigger is not always ebst as we have found to our cost with the banks!
Not to sure about that - US, Canadian ad Australian credit unions have been consolidating for quite some time.
U.S. 2003 = 9369 2010 = 7491 a 20% decline (no. in 1995 c*12,200)
Canada 2003 = 1298 2010 = 877 a 32% decline (no. in 1995 2,448)
Australia 2003 = 187 2010 = 105 a 44% decline (no. in 1995 291)
While they have been "consolidating" the numbers of outlets and customers have grown as has the range of products and services.
The equivalent data here is:
Ireland 2003=421 2010 = 409 a 2.8% decline (no. in 1995 c421)
* about 35 US credit unions have demutualised. One Aussie CU has converted to a mutual bank.
It does make sense for a well run, well capitalised credit union which is paying a dividend to take over a smaller, poorly run, undercapitalised credit union. They should be able to improve their management.
How does it make sense for the members of the well run credit union to subsidize the members of the poorly run credit union thereby affecting their own dividend and ability to give loans in their locality ? It surely wouldn't be in their best interests.
To force mergers.
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