tailieunhanh - Cross usage of banks and credit unions

Federal Credit Unions (FCU’s) represent a growing part of consumer banking in the United States. They are aggressively seeking new customers in many markets, and are no longer the financial institution of choice for only company/organization employees who have very unsophisticated financial needs. This article examines survey data from almost 1,7000 households in a mid-sized US city to explore the degree to which consumers use both credit unions and banks across several debit and loan products. | Journal of Applied Finance Banking vol. 4 no. 4 2014 55-63 ISSN 1792-6580 print version 1792-6599 online Scienpress Ltd 2014 Cross Usage of Banks and Credit Unions Jeffrey Gutenberg1 William Caren2 Michael Schinski3 and James Prinzi4 Abstract Federal Credit Unions FCU s represent a growing part of consumer banking in the United States. They are aggressively seeking new customers in many markets and are no longer the financial institution of choice for only company organization employees who have very unsophisticated financial needs. This article examines survey data from almost 1 7000 households in a mid-sized US city to explore the degree to which consumers use both credit unions and banks across several debit and loan products. JEL classification numbers G210 Keywords Bank marketing credit union marketing 1 Introduction In 1998 following a Supreme Court decision that struck down an attempt to liberalize membership rules for credit unions Congress passed new legislation overriding the court s decision and created a distinct competitive advantage for these once highly-regulated financial institutions. Now credit unions not only had a cost advantage over banks due to their non-profit tax status but they could also expand their reach geographically with relatively few restraints. The result was a period of consolidation merger and an expansion of geographic markets followed by increasing competition with commercial banks. Despite these advantages credit unions sometimes lack expertise in market research promotion strategy and product development. Further their management often exhibits an attitude of moral superiority to banks which may cause them to overlook the necessity of employing standard marketing practices in 1State University of New York College at Geneseo. 2State University of New York College at Geneseo. 3State University of New York College at Geneseo. 4Nazareth College. Article Info Received May 5 2013. Revised June 10 2013. Published online July 1 2014