Date of Conferral
Doctor of Business Administration (D.B.A.)
In the United States, faith-based and other small credit unions are vanishing at the rate of nearly a credit union each workday. The purpose of this causal-comparative study was to provide managers of faith-based credit unions with information about differences in financial performance and risk tolerance between faith-based and non-faith-based credit unions in order to improve their investment strategy and long-term sustainability. The study included a comparison of ratios measuring the financial performance and risk tolerance of randomly selected faith-based credit unions in the United States with the corresponding ratios of non-faith-based credit unions of similar size and location from 2003 to 2012. The data were collected from the National Credit Union Association, the U.S. government regulator of federally insured credit unions. The data analysis involved t tests and one-way ANOVAs to determine the differences in mean ratios of financial performance and risk tolerance between faith-based and non-faith-based credit unions. The findings demonstrated mixed support for the theoretical framework based on the Protestant ethic theory, which holds that certain traits associated with religion (e.g., thrift and debt avoidance) might influence financial performance and risk tolerance. The findings revealed significant differences between faith-based and non-faith-based credit unions in capital adequacy, liquidity risk, and credit risk, but not in profitability and interest rate risk. The implications for social change include the potential to strengthen the risk management and investment strategies for faith-based credit unions, thereby helping to ensure the continuation of vital financial services valued by members and their communities.