Posted on 02/14/2009 5:20:05 PM PST by Jet Jaguar
I think, the smarter than god ceo's of wall street and financing have already accomplished that. Has anyone ever ask any of them, where they thought the profit was a thirty to one leverage.
I chair my credit union board. We learned about this a week ago. The credit union industry is not protected directly from the federal govt like banks with the FDIC. We are a member owned organization that support each other. The main bank IS our FDIC. The next layer of membership is at the state level in which there are something like 28 of these (not each state has one). Credit Unions are members of this second tier. We borrow from this second tier, this second tier borrows from this large unit. They are hurting from this economy since any funds are invested. Fortunately credit unions investments are more controlled than most banks.
The article is correct, smaller and under capitalized credit unions may collapse. Fortunately my credit union is solid due to our management principals. however, we anticipate a negative income rate this year. Basically, our assessment equals what our projected income was to be.
We set our budget in December and we tie in management and employee incentives to ratios that will be affected by this decision. Our employees stand to lose due to this decision but our members and their money will be fine.
I will be presenting this issue next month at our annual meeting. For us we are at least able to get out in front to our members.
Support your credit union as they are generally managed more conservatively than banks. Most people have access to a credit union.
Thanks for the info.
Time to sharpen the pitchforks and soak the torches in pitch. Who do these sonz@bitches think they are?
Credit unions are popular alternatives to banks. They are owned, in effect, by their depositors. Without corporate profits or shareholders to worry about, credit unions can offer higher interest rates on savings accounts and charge lower rates for mortgages, auto loans or other financial help.
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Another thing Credit Unions don’t have to worry about? TAXES! Credit Unions are a dinosaur, they should be held to the same standards as commercial banks.
Did your colleague mention that Credit Unions don’t have to abide by the Comm Reinvestment Act? Did he mention that they don’t pay taxes? Did he mention that Credit Unions are available to ALL citizens in the counties in which they operate vs. previous rules that only allowed members within a specific class (ie., work for a specific company, etc.)
I think they deserve it.
RushingWater:
Credit Unions are able to NOT charge service charges because they do NOT have to pay income taxes.
When you say "main bank" and "large unit" are you referring to the Central Federal that just went bust? I may be really old-fashioned, but I always thought that CU's paid interest to depositors from interest received on loans. I thought, in the case of smaller ones I was in years ago, that they were economically self-sufficient. Then about 6 years ago my small credit union in Virginia was "bought" by a large credit union.
The board decided and browbeat the members to turn over their assets and members to the borg. I voted "Hell no". The Borg turned out to be more of a scam than a credit union. Loan rates went up a bit, but savings and CD rates went way down after the takeover. In fact I usually had a lot of cash sitting around in the old credit union and there were several times when they called me and asked if they could put some in a CD at a favorable rate in order to get their long term ratio up.
In contrast, the new credit union sent me literature on how I should send my money to their "partner" brokerage. They would make it really easy and have lots of intricate ties between the not-for-profit credit union and the very much for-profit brokerage. The loans rates then went down in 2002-4 with the credit bubble, which is the advantage of being part of the larger financial system (our members mortgages were sold as ABS). But when the larger financial system crumbles (it is arguably dead already), you die with it.
Why in the heck are they buying mortgage-backed securities? That is not part of the mission of a credit union.
Not true. Navy Federal, for example, is only available to Defense.
Perhaps you're talking about credit unions like the one in my area: UVA Community Credit Union, which does have a community charter and serves its members in several counties in Central Virginia.
However, not all credit unions are of that flavor, and the membership of many remains confined to specified eligibility groups.
Until then, please don't falsely claim that all credit unions offer geographic eligibility rather than those "previous rules" (which haven't gone away at all). It all depends on the credit union's charter.
Who are you, Joe "Patriotic to pay taxes" Biden? I take it you are opposed to free associations among US citizens.
Bailout, it’s the gift that keeps on giving.
Are you saying that the main US credit union insures all depositors' FCU accounts? That does not sound right. My deposits are insured by the NCUSIF. According to my credit union, "All deposits are federally insured by the full faith and credit of the US Government to at least $250,000 through the NCUSIF - the National Credit Union Share Insurance Fund."
Maybe different credit unions have different ways to insure doposits.
doposits->deposits
Someone needs to see where Obama puts his money and how much he is making on his investments, etc. Not that I wish any bank or S & L to fail, but I hope he looses everything he has ever saved and is forced to take in tenants/rent out rooms in his million dollar house just to pay the mortgage like I have seen many others have to do already! After all, Obama needs to practice what he preaches - socialism does not allow big houses for one family. His place needs to be made into apartments for the poor so he can "spread the wealth."
I worked in the banking industry most of my life, spending 2 years at a credit union. They need to be assessed to bail out U.S. Central Federal Credit Union.
Keep in mind, CU’s don’t pay federal tax or any tax - now, on it’s surface that seems fine, but looking at it from the inside out - it’s a taxpayer rip off. Now, I know that they are owned by members, but the fact is they are not out to service the little people as they say they are with being the reason they were created in the first place.
Second step, CU’s should pay tax just like any other business.
If I understand “fractional-reserve banking” enough, banks and such only receive about 1/5 of what they actually lend out, with all the rest being “loaned” by the Federal government, and with all of it being monies the bank or credit unions can loan and receive interest back on.
I think you're both on the wrong board. People who think of themselves as “little people”, and call free enterprise and group financial cohesiveness “a taxpayer ripoff” are usually found on the more liberal boards where those ideas are now running our country....into the ground! The ideas that the two of you are espousing are socialist garbage and make me sick!
Navy Federal has opened their membership quite a bit in the recent past.
When I first joined in 1985 even though they had branches in San Diego you couldn't join them there. You had to join overseas on a deployment. IIRC, it had to do with there being other credit unions that were chartered to serve the military in the area. I joined Navy Fed in Subic.
Eventually they were able to sign up Navy and Marines anywhere in CONUS. Then they started taking active duty from any service. Now they even take immediate family if a member sponsors them. My father has a Navy Federal account through me.
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