IRS redux? Feds snub top-performing ‘Freedom’ credit union, but bend the rules for Big Labor

Idaho Freedom Foundation ^ | June 1, 2019 | Wayne Hoffman

[Twotone]

Federal regulators need to explain why they’ve granted a perpetually-floundering California credit union that serves organized labor permission to raise money from investors—especially considering those regulators haven’t given the same green light to a strong and growing credit union that serves rural Idahoans.

Credit unions are member-owned nonprofits and generally can use only retained earnings for expansion plans. If a credit union wants to grow using secondary capital from investors, it must first seek permission from the National Credit Union Administration (NCUA), which is supposed to evaluate the credit union’s stability and financial position before giving the green light.

A spokesman for the NCUA wasn’t immediately able to explain why Union Yes Federal Credit Union, headquartered in Orange, California, was approved to raise secondary capital, while Freedom Northwest Credit Union, located in Kamiah, must grow without an infusion of cash it hoped to get from interested investors.

A recent article in the American Banker trade magazine heavily criticized the NCUA’s decision regarding Union Yes, calling the credit union “thinly capitalized.” Bankers may have their reasons to oppose credit unions’ use of secondary capital, but the magazine closely examined the California credit union’s financial situation and took exception with the NCUA decision on that basis.

The government’s approval of Union Yes’ capital raise indicates NCUA regulators are “willing to sign off on things that the Federal Reserve, the Federal Deposit Insurance Corp. and the Comptroller of the Currency would be unwilling to approve,” John Reosti wrote in the trade magazine. In that article, an NCUA spokesman declined to comment on the decision.

[SunkenCiv]

Federal regulators need to explain why they’ve granted a perpetually-floundering California credit union that serves organized labor permission to raise money from investors—especially considering those regulators haven’t given the same green light to a strong and growing credit union that serves rural Idahoans.

[eyeamok]

The investors for the California Credit Union are the Drug Cartels, Billions of Dollars annually are Laundered thru California Financial Institutions, this is one of the ways they Launder Money, that is why, nothing to see,move along now.

[gibsonguy]

The IRS is crawling with Rats....still.

[PAR35]

Well, it would make more sense to let a ‘thinly capitalized’ institution raise more capital than it would to let a well capitalized institution.

What did strike me about the Idaho institution was the car loan that looks like it is more than a year delinquent. I’d be interested in hearing the story behind why that one isn’t a writeoff.