Credit Union Net Charge-Off Evidence for the United States

Abstract: Credit unions represent an important source of financial capital to the small business and consumer sectors in the United States. In spite of that, there is comparatively little research on credit union financial ratio performance. This study attempts to partially fill that gap in the applied economics literature by empirically analyzing the behavior of credit union net charge-offs. Results using fourth quarter 2015 data indicate that borrowing costs, business conditions, and loan management practices affect credit union net charge-off ratios. These results corroborate recent findings for commercial banks in at least two countries but have not previously been examined for thrift institutions. Keywords: Credit Unions, Regional Economic Conditions, Net Charge-Offs JEL Classification Number: E32, G21, M21