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Chapter Seventeen

Chapter Seventeen. Savings Associations and Credit Unions. Thrift Institutions. Mutual Savings Banks Depositors owners of the firm Stock in the bank, not sold or issued Savings and Loan Association Created by Congress Insured deposits and scandals S&L bailout Credit Unions Ownership

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Chapter Seventeen

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  1. Chapter Seventeen Savings Associations and Credit Unions

  2. Thrift Institutions • Mutual Savings Banks • Depositors owners of the firm • Stock in the bank, not sold or issued • Savings and Loan Association • Created by Congress • Insured deposits and scandals • S&L bailout • Credit Unions • Ownership • Membership

  3. Savings and Loan Industry Today • Will Review • Number of institutions • Types of loans • S&L size • S&L assets • S&L liabilities and net worth • Capital

  4. Decline in Number of Savings and Loan Associations Figure 17-3:Number of Savings and Loans in the United States, 1993–2001 FDIC statistics on banking industry http://www2.fdic.gov/qbp

  5. Figure 17-2: Total Assets of Savings and Loan Associations, 1979–2001

  6. Savings and Loan Assets Figure 17-1:Distribution of Savings and Loan Assets, 2001

  7. Figure 17-4: Average Assets per Savings and Loan Association, 1984–2001

  8. S&L Balance Sheet Figure 17-5:Consolidated Balance Sheet for Savings and Loan Associations ($ billions, second quarter, 2001)

  9. The Future of the S&L Industry (Net Income) Figure 17-6:Net Income of Savings and Loan Associations, 1984–2000

  10. Savings and Loan’s Return on Equity Figure 17-7:Average Return on Equity for Savings and Loan Institutions, 1993–2001

  11. Mutual Ownership Owned by depositors Common Bond Membership Defined field of membership Nonprofit, Tax-Exempt Status Lower service fee Regulation and Insurance Central Credit Unions Help with members’ credit needs Invest excess funds Hold clearing balances Provide educational services Credit Union Size Trade Associations Credit Unions National Credit Union Administration http://www.ncua.gov

  12. 10 Largest Credit Unions

  13. Figure 17-8: Number of Credit Unions, 1933–2001

  14. Types of Accounts • Regular Share Accounts • Savings accounts • Receive no interest • Do receive dividends • Share Certificates • Compatible to CDs • Share Draft Accounts • Pay interest • Write drafts against account

  15. Figure 17-9: Share Distribution

  16. Types of Credit Union Loans Figure 17-10:Loan Distribution

  17. Advantages and Disadvantages of Credit Unions • Advantages • Employer support • Tax advantage • Strong trade associations • Disadvantages • Common bond requirement

  18. Figure 17-11: Credit Union Membership, 1933–2002

  19. Future of Credit Unions Figure 17-12:Credit Union Assets, 1993–2002

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