Credit Unions during the Crisis: Did They Provide Liquidity?

Applied Economics Letters 26(3), pp. 174-179, 2019

15 Pages Posted: 8 May 2019

See all articles by Pankaj K. Maskara

Pankaj K. Maskara

Eastern Kentucky University - Accounting, Finance, & Information Systems; Nova Southeastern University

Florence Neymotin

Kansas State University - Department of Economics

Date Written: February 26, 2018

Abstract

Using Consumer Finance Monthly national survey, we demonstrate that credit unions in the US did little to help consumers obtain home equity lines of credit (HELOC) during the recent financial crisis. Our results hold after including a two-stage regression structure using the availability of credit unions as the identifying instrument. Use of Heckman procedure to adjust for possible sample selection bias does not alter our findings. Additionally there is no evidence to suggest that low income households residing in states experiencing housing price declines received more HELOC from CUs. Since credit unions are sometimes lauded for providing liquidity during times of crisis and helping to serve those who are otherwise less able to obtain funds, our results provide an empirical counterpoint to this common conception.

Keywords: Credit Union, Home Equity Line of Credit, Liquidity, Financial Distress

JEL Classification: G21

Suggested Citation

Maskara, Pankaj K. and Neymotin, Florence, Credit Unions during the Crisis: Did They Provide Liquidity? (February 26, 2018). Applied Economics Letters 26(3), pp. 174-179, 2019, Available at SSRN: https://ssrn.com/abstract=3353559

Pankaj K. Maskara (Contact Author)

Eastern Kentucky University - Accounting, Finance, & Information Systems ( email )

United States

Nova Southeastern University ( email )

3301 College Avenue
Ft. Lauderdale, FL 33314
United States

Florence Neymotin

Kansas State University - Department of Economics ( email )

Manhattan, KS 66506
United States

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