FT. LAUDERDALE, Fla.—A study by two professors at Nova Southeastern University has found underserved households are less, not more, likely to enjoy the services of credit unions, according to analysis by Keith Leggett.
The study used data from the Consumer Finance Monthly (CFM) survey. The time period of the study was 2007 thru 2013.
“A question in the survey asked respondents if they have a checking or a savings account. If they answer no, then they are treated as unbanked,” Leggett said. “The paper found that only 4.3% of the respondents have a credit union membership, but are also unbanked.”
Fine-Tuning Needed
According to the paper, more educated and well-off households have a higher likelihood of belonging to a credit union, Leggett said.
“The authors state that it is possible small, low-income credit unions may serve the underserved; but on average, credit unions do not,” Leggett said.
The paper states that its findings indicate that "there is room for the government to fine tune its credit union tax exemption in order to ensure that subsidies flow to the needy rather than to the generally well-off," Leggett noted.