Chapter 20, Problem 1CTQ

Summary Introduction

Case summary:

The A is a; largest credit union having 146 members and $5088 assets in the initial stage of its establishment. The reason behind the establishment of this credit union is failure of banking system during the period of great depression.

The A credit union served around the seven decades for united employees and enlarge the business beyond the single employee focus. Then the credit union reached in the position of countries largest credit union and a rapid growth in number of members and assets.

The A provides number of benefits to its potential customers and try to convince customers thatcredit union can satisfy their needs with low fees, loan rate and high interest rate on deposits. Then the promoting advantage of credit union helps to shift most of the customers’ accounts from bank to credit unions. Now a days the members of credit union is growing day by day.

To discuss: Reason behind the big bank customers unwilling to move credit unions

Explanation of Solution

This kind of big bank customers have certain pride that banks are more efficient in serving customers than credit unions. They are thinking that the banks are only able to provide certain advanced technology and other facilities compared to a credit union. However credit union have entry to same kind of methods and technologies as banks hindered by legacy information system or certain regulations in dealing interstate transactions.