Credit Union Performance in the Post-CUMA Era: Focus on University Credit Unions

This study contributes to this literature by assessing the impact of credit union expansion on the relative efficiency of university credit unions. In an early study of credit union efficiency using data from 1990, Fried, Lovell, and Turner (1996) found that university credit unions were more efficient than other types of credit unions. In the ensuing twenty years, the financial markets have changed substantially, and the financial services industry has become more competitive. This study argues, as do others (e.g., Mohanty, 2006) that credit unions compete with banks and other financial institutions. Indeed, this perspective is supported by the extensive and continuing lobbying efforts by banks against the tax-free status of credit unions. In this article, the authors study credit union efficiency with an emphasis on comparing the performance of university credit unions with that of non-university credit unions. A previous study making this comparison uses data from 1990