Analysis of Small Credit Union Trends and Opportunities for Accountants

Abstract

This paper reviews the benefits that small credit unions in the United States confer to their members and communities, the decrease in the number of institutions and members in recent history, the challenges facing small credit unions today, and how accountants can help small credit unions reverse these negative trends. Credit unions are able to pay higher interest rates on deposits, charge lower rates on borrowings, and charge fewer and lower fees than traditional banks. Additionally, bank customers benefit from the presence of credit unions through increased competition on rates. In the U.S., credit unions also serve traditionally underserved populations and, in the past, experienced high customer satisfaction ratings. However, there has been a 22 percent reduction in the number of small credit unions since 2008. This decrease can be linked to a decline in customer satisfaction, which is a result of the increased compliance and regulatory burden on already overworked staffs. The objective of this paper is to identify ways accountants can help small credit unions reverse these negative trends and thrive. By providing compliance and strategic planning support, accountants can reduce the time credit union staffs spend on non-customer related tasks and allow them to focus on serving their customers. This should allow credit unions to return to their previous levels of customer satisfaction and reverse the decline in membership and institutions.

Marketing Strategy Planning Based on Customers Expected Services: Evidence from Sharia Cooperatives in Bandung

“…The results of the analysis show that the most dominant factors in determining strategy are customer needs and customer philosophy about service. This is consistent with the results of (Burke & Research, 2014) which explains that cooperatives provide many benefits to their members and surrounding communities in the form of higher deposit rates, lower loan interest rates, and can enjoy several loan facilities that are not available in several banking institutions; members also receive more personal (intimate) services compared to more formal services at other financial institutions. Meanwhile according to (Muflih, 2013) interest is forbidden in Islam because it includes usury so that Sharia cooperatives are the best way to overcome this.…”

“…The factor of personal needs and personal philosophy about service is strengthened by the results of a study (Burke & Research, 2014) entitled Analysis of Small Credit Union Trends and Opportunities for Accountants , that Cooperatives provide many benefits to their members and surrounding communities in the form of higher deposit rates, smaller loan interest rates, and can enjoy several loan facilities that are not available in some banking institutions; members also receive more personal (intimate) services compared to more formal services at other financial institutions. Meanwhile according to (Chong & Liu, 2009); (Muflih, 2013) interest is forbidden in Islam because it includes usury, because it appears Sharia financial institutions.…”

Sustainable Strategic Growth, Savings and Credit Cooperative Society and Credit Union Industry: A Global Overview

“…Additionally, bank customer benefits from the presence of credit union through increased competition on rates. Credit Unions are able to pay ISSN 2520-0461(Online) Vol.3, Issue 1 No.4, pp 37 -56, 2018 www.ajpojournals.org 40 higher interest rates on deposits, charge lower interest rate on borrowings, and charge lower and fewer fees than traditional banks (Burke, 2014). One of the most developed movements of credits unions is located in Canada.…”

“…In 2016 there were 34 countries in Africa and about 86 worldwide which have embraced the concept of Credit Unions (Oteng-Abayie, Owusu-Ansah & Amanor, 2016). Credit Unions have experiences declines in member's satisfaction ratings which could be attributed to the rapid growth of larger Credit Unions that provide less personal service, while on the other hand Credit Unions are dealing with increasing regularly and compliance burdens (Burke, 2014). Small Credit Unions in the United States of America are facing many hardships that are increasing in scope, year over year.…”

“…Small Credit Unions in the United States of America are facing many hardships that are increasing in scope, year over year. The number of Small Credit Unions is declining, and overall Small Credit Unions goes beyond mergers with larger companies (Burke, 2014). Large research on Savings and Credit Cooperative Societies focus more on assessing their performance without looking at key performance drivers such as growth strategies such as market penetration (Jeje, 2015).…”