Our new study, Cooperative Comebacks: Resilience in the Face of the Hurricane Katrina Catastrophe, examines how credit unions fared in the wake of the disaster. Author Mark Klinedinst, an economics professor at the University of Southern Mississippi, compares the experience of credit unions and banks in southern Mississippi and New Orleans at the aggregate and case study levels. Klinedinst argues that analyzing credit unions under this kind of duress may be useful in identifying cooperative strengths and weaknesses that are not apparent under normal circumstances.
Although banks and credit unions have generally recovered and even thrived since Katrina struck, the comeback is not evenly distributed. Klinedinst conducted a variety of statistical regressions and discovered that the greatest predictors of institutional recovery are size (bigger is better) and location (Mississippi is more favorable than New Orleans).
Klinedinst also observes that credit unions received significant assistance from other credit unions, nongovernmental local organizations, and national credit union associations. Banks mainly received nongovernmental assistance from other branches of the same institution not impacted by the storm, but not from other banking institutions. The social network of credit unions seems to be at least partially responsible for their comeback, as represented by a 2.3% increase in credit union membership in the affected areas during the period studied.