How Economy of Scale proves Representative Maxine Waters may be Right

Lake Forest, IL (May 13, 2019) The Economy of Scale has eluded executives at banks, credit unions & thrifts. Even Adam Smith the first economist failed to give a complete description of how the economy of scale works in his book, The Wealth of Nations. “The economy of scale (EOS) is a very difficult algorithm to derive and process,” claims Michael Moebs, Economist & CEO for Moebs $ervices, Inc., an economic research firm. “While we have precisely devised how to do an EOS, it is best for executives to first learn how expenses flow as volume and size increase,” notes Moebs.
There is a point in the depository business where bigger is not better.

The Future for Banks & FinTechs lies with Credit Unions’ High Expenses & High Fee Revenue

Lake Forest, IL (April 30, 2019) Shane Sullivan played grammar school football and in 8th Grade was 6’ tall and weighed 310 lbs. His team won almost every game, even though Shane was very slow carrying his heavy frame. Shane’s  team lost in the playoffs, and he never played football again. Credit Unions are like Shane. CUs support a heavy frame of expenses – over 20% higher than their competition.  Yet, CUs offset these high costs with high service charges on deposit more than twice banks. “Could Shane be predicting a future for all depositories?” so asks a new Moebs Study.

CU Today 04/22/2019 08:20 pm
VIENNA, Va.—For the first time in world history, a credit union has surpassed $100 billion in assets—and it continues to grow at a record pace.
In the process, Navy Federal Credit Union has also entered the “Too Big To Fail” category, according to one economist.

LAKE FOREST, Ill.—As the Major League Baseball season gets under way, the Federal Reserve has struck out twice with its last two rate moves, according to one economist who suggests if financial institutions raise their deposit rates the central bank will likely hold off on any further rate increases over next two years.

These are the slides from a speech, “Trends in Financial Services Affecting Regulation”
on April 2, 2019 at NASCUS National Meeting in Washington D.C. by Michael Moebs.
NASCUS is the National Association of State Credit Union Supervisors.

Bond Rates and Stock Prices are volatile because the Fed has forgotten about Deposit Pricing.
Deposit Pricing is lagging far behind Fed Funds.
Investors, Savers and Mike Mayo know why the lag.
Ask Moebs!

Overdrafts are NOW elastic. Raising price will lower revenue by reducing consumer usage.
There are ways to increase OD Revenue while helping the consumer.
Email, text or call for more.

“On Valentine Day this year, Mike Mayo – highly respected bank analyst of Wells Fargo Securities, ask Mike Moebs to do a repeat of his very well regarded “State of Deposit Pricing” of November, 2017. This was an invitation only webinar attended by over a 100 institutional investors. The webinar was scheduled for 60 minutes but got extended to 82 minutes with no one leaving. The following transcript is of this February 14, 2019 webinar.”

How do you feel when you get bad information when trying to make a decision?
Your kids you may expect, but your bank or credit union?
39.6% of financial institutions give out bad data!
Call, email or text for more.