Michigan Study Discovers CUs Find Value In Charter; Examines Options

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Michigan credit unions continue to perceive value in the credit union charter, according to a new study.

The study, commissioned by the Michigan Credit Union Foundation (MCUF) and conducted by University Financial Associates, also found that the ratio of federal charters to state charters has remained fairly stable during the last decade, and that credit unions are growing larger and more diverse through consolidation and multiple common bond charters to better compete with banks.

The study's findings are published in the "The Credit Union Charter in the 21st Century." It seeks to identify the unique competitive benefits of federal and state credit union charters relative to a mutual savings bank charter in three areas: taxes and fees, charge-off rates and loans, and investment in derivative assets. The report also focuses on the advantages and disadvantages of each financial institution related to taxes, regulatory operating fees, deposit insurance, as well as differences in limitations in powers and authorities, capital requirements and regulatory requirements.

"The objective of the research is to provide a clear summary of the relative strengths and weaknesses of the state and federal credit union charters as well as the mutual savings bank charter," said Michigan league CEO David Adams. "By understanding the advantages and disadvantages of each, credit union leaders will be able to make an informed choice should they ever be faced with the decision to switch charters."

MCUL-affiliated credit unions can download a copy of the report for free at https://secure.mcul.org/store/section.php?xSec=56. All others may download the report for $99.00.

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