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Blurred Vision: Challenges in Credit Union Research and Modeling

Credit unions have been under-researched despite their growing role in the U.S. financial system. Now they face a rapidly changing, highly competitive environment, thus creating a compelling need for additional research.

Executive Summary

Professor George Overstreet and Geoffrey Rubin’s monograph shows how credit unions differ from other financial intermediaries, reviews previous academic studies, and suggests opportunities for meaningful future research.

What is the research about?

The authors illustrate how academic research is an ongoing process of testing ideas and generating controversy that leads to new and refined perspectives on key issues. They also provide an overview of credit union research for other researchers, show how credit unions as not-for-profit, mutual organizations do not fit easily into standard models of the profit-maximizing shareholder-owned firm, and point out problems encountered in drawing practical conclusions about credit unions from existing theory.

What are the credit union implications?

This paper seeks to stimulate focused, relevant research on credit unions, thus enhancing credit union practice by fostering better theory. The scope and direction of the industry's continuing evolution warrants ongoing observation and analysis. In particular, rigorous treatment of the movement's past performance would provide a missing vantage point from which to assess the industry's future. Given its unique and evolving structure, growing prominence, and timely challenges, enhanced study of the credit union system is warranted.

This report is sponsored by the Center for Credit Union Research at the University of Wisconsin-Madison.

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