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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 - PowerPoint PPT Presentation
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Chapter Seventeen
Savings Associations and Credit Unions
Slide 17–3
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
Slide 17–4
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
Slide 17–5
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 industryhttp://www2.fdic.gov/qbp
Slide 17–6
Figure 17-2: Total Assets of Savings and Loan Associations, 1979–2001
Slide 17–7
Savings and Loan Assets
Figure 17-1: Distribution of Savings and Loan Assets, 2001
Slide 17–8
Figure 17-4: Average Assets per Savings and Loan Association, 1984–2001
Slide 17–9
S&L Balance Sheet
Figure 17-5: Consolidated Balance Sheet for Savings and Loan Associations ($ billions, second quarter, 2001)
Slide 17–10
The Future of the S&L Industry (Net Income)
Figure 17-6: Net Income of Savings and Loan Associations, 1984–2000
Slide 17–11
Savings and Loan’s Return on Equity
Figure 17-7: Average Return on Equity for Savings and Loan Institutions, 1993–2001
Slide 17–12
Credit Unions
• 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
National Credit Union Administrationhttp://www.ncua.gov
Slide 17–13
10 Largest Credit Unions
Slide 17–14
Figure 17-8: Number of Credit Unions, 1933–2001
Slide 17–15
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
Slide 17–16
Figure 17-9: Share Distribution
Slide 17–17
Types of Credit Union Loans
Figure 17-10: Loan Distribution
Slide 17–18
Advantages and Disadvantages of Credit Unions
• Advantages– Employer support
– Tax advantage
– Strong trade associations
• Disadvantages– Common bond requirement
Slide 17–19
Figure 17-11: Credit Union Membership, 1933–2002
Slide 17–20
Future of Credit Unions
Figure 17-12: Credit Union Assets, 1993–2002