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The Effects of Credit Union Service Organizations on Credit Union Performance
Shane A. Van Dalsem
The Journal of Finance Issues
This study examines the effects of credit union service organizations (CUSOs) on credit union performance for the period 2009 through 2014. I use random effects models with Mundlak (1978)correction to estimate the relationships between CUSOs and credit union performance variables.Credit union participation in CUSOs increased over the sample period and participation increaseswith credit union size. CUSO participation is divided based on whether the credit union whollyowned the CUSO or was required to collaborate with other institutions. I find evidence thatparticipation in wholly-owned CUSOs increases the interest rate spread, collaborative consumermortgage origination reduces loan rates, and insurance brokerage or agency significantlyincreases non-interest income for credit unions. The results of the study support existing findingsthat small organizations are reluctant to give up autonomy and offer insight on which CUSOsbenefit credit unions and their members.