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The Influence of Credit Union and Savings and Loan Competition on Bank Deposit Rates in Idaho and Montana

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Abstract

This study examines the effect of S & L and credit union competition on bank behaviorin Idaho and Montana. A structure-performance OLSmodel is used to estimate bank interest rates oncertain deposits. Two key independent variables arelocal market share of credit unions and S & Ldeposits. Overall, previous studies found littleevidence that thrift competition affects bankperformance. We found some evidence that thriftcompetition, especially from credit unions, resultsin higher interest rates for bank CDs. Theseresults have policy implications as banking groupscurrently seek to restrict credit union competition.

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Authors and Affiliations

  1. Department of Economics, Idaho State University, Pocatello, Idaho, 83209, U.S.A.

    Robert J. Tokle

  2. Department of Management, Idaho State University, Pocatello, Idaho, 83209, U.S.A.

    Joanne G. Tokle

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  1. Robert J. Tokle
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  2. Joanne G. Tokle
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Tokle, R.J., Tokle, J.G. The Influence of Credit Union and Savings and Loan Competition on Bank Deposit Rates in Idaho and Montana. Review of Industrial Organization 17, 427–439 (2000). https://doi.org/10.1023/A:1007894216526

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  • DOI: https://doi.org/10.1023/A:1007894216526

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