The system is so broken it's not even funny.
It's not broken at all. It's running exactly the way the entrenched players want it to run, squashing competition with heavy-handed regulators and killing innovation at pretty much every turn.
QED
Difficult Times at Our Credit Union
71–80 of 158 posts
Re: Difficult Times at Our Credit Union
#72My guess is that, given the choice, practically everyone would prefer to bank with a member-owned cooperative, i.e. a credit union, than a for-profit bank owned by outside shareholders. I mean, think about it: sneaky fees and outrageous surcharges are anathema, because it's more important for members to be satisfied with their experience than to wring out every nickel and dime of profit at the expense of customer sat…
I bank with SF Fire Credit Union. They offer services to any SF resident. They gave me a line of credit, offer mortgages, online banking, free checking and saving, reimbursement for ATM fees. In other words, there is no reason to prefer Bank of America to them. So why does much of SF still use Darth Vader's bank?
Americans have no one to blame but themselves. When I tell people they should divest their savings from BoA, a bank which was directly responsible for massive fraud that caused the housing bubble, they look at me blank eyed and move on. These people have power because we gave it to them.
Re: Difficult Times at Our Credit Union
#73Earlier quoted context omitted.
> In 2011 an average checking account cost $349 for a bank to maintain From the article: "The single biggest cost, Israel says, is the cost of bank branches and ATMs. Another 20% is spent on back-office functions, including maintaining call centers and payment operations." It seems like this is all about bad workflows and customer service... which are technical issues, not inherent business needs. There are probably…
Sure, you could run a bank with no branches and no support phone number.
There are several online banks in Europe that don't have branches.
Re: Difficult Times at Our Credit Union
#74The number of US credit unions thrown around is a fairly misleading. The majority of decreases in this number are mergers, not CUs being "shut down". A more useful number may be the total number of US credit union members over the same period of time.
The credit union that disappears form the official count usually doesn't see much more than a name change, and adding new services & members. This usually results in better service for both original CUs members; a combination of branch locations, ATMs, and services from both of the original CUs.
I've also never heard of "force them to merge their assets into bigger credit unions". Would be very interesting to hear more specifics about this, if it actually means something more than 'hassle them so much that they find a larger CU to merge into, on their own, just to escape'.
Re: Difficult Times at Our Credit Union
#75My guess is that, given the choice, practically everyone would prefer to bank with a member-owned cooperative, i.e. a credit union, than a for-profit bank owned by outside shareholders. I mean, think about it: sneaky fees and outrageous surcharges are anathema, because it's more important for members to be satisfied with their experience than to wring out every nickel and dime of profit at the expense of customer sat…
You're ignoring a very important part of the story: credit unions, unlike banks, are tax-exempt: http://www.treasury.gov/press-center/press-releases/Document... (see page 2). Those "mutuality" restrictions you note are the trade-off for tax-exempt status. Otherwise, the regulations applicable to credit unions and banks are more or less the same (see pages 1-2).
Re: Difficult Times at Our Credit Union
#76My guess is that, given the choice, practically everyone would prefer to bank with a member-owned cooperative, i.e. a credit union, than a for-profit bank owned by outside shareholders. I mean, think about it: sneaky fees and outrageous surcharges are anathema, because it's more important for members to be satisfied with their experience than to wring out every nickel and dime of profit at the expense of customer sat…
These "regulatory hurdles" that prevent credit unions from competing with banks were not created in a vacuum, they were created by the banks. No amount of Kickstarting will solve the problem of our political system's fetish for financial domination. The cause is obvious: as a for-profit institution, a bank has the money to lobby for preferable laws, let alone the laws they write themselves. If people began switching…
The "banks writing the laws" narrative is misplaced in this context. Credit unions are tax-exempt. If you remove the mutuality restrictions applicable to them, they would not be "compet[ing] on honest terms" with commercial banks--they would have a major competitive advantage on the basis of their tax status.
Re: Difficult Times at Our Credit Union
#77My guess is that, given the choice, practically everyone would prefer to bank with a member-owned cooperative, i.e. a credit union, than a for-profit bank owned by outside shareholders. I mean, think about it: sneaky fees and outrageous surcharges are anathema, because it's more important for members to be satisfied with their experience than to wring out every nickel and dime of profit at the expense of customer sat…
How obscure can the common affiliation be? Does "dislike of hidden charges" count? :)
Re: Difficult Times at Our Credit Union
#78My guess is that, given the choice, practically everyone would prefer to bank with a member-owned cooperative, i.e. a credit union, than a for-profit bank owned by outside shareholders. I mean, think about it: sneaky fees and outrageous surcharges are anathema, because it's more important for members to be satisfied with their experience than to wring out every nickel and dime of profit at the expense of customer sat…
Could someone just create Worldwide Credit Union and just require living on Earth to be the affiliation?
Re: Difficult Times at Our Credit Union
#79Earlier quoted context omitted.
because 2008 made out clear that no oversight works just fine. those are laws to protect laws placed to protect banks et al long before. the original laws give some state insurance for a very cheap price, which can easily be abused if someone start a bank/union, give lots of loans to a partner and then crash said bank/union. ... which is exactly what the 2008 was about if you stop believing all banks were surprised b…
I keep hearing this argument, 'no oversight', and I have yet to see proof of it. Finance remains the most heavily regulated industry, as it has for decades.
> Finance remains the most heavily regulated industry, as it has for decades.
I'm not trying to be pedantic if you were just speaking in hyperbole, but I'm curious on the methodology for determining that.
Re: Difficult Times at Our Credit Union
#80Earlier quoted context omitted.
He mentioned that he didn't want to start a predatory subprime loan shop. He wanted to offer non-predatory lower interest loans to higher risk clients, in concert with banking services that are difficult to provide to higher risk immigrant clients like checking and savings accounts and debit cards. But the NCUA wouldn't allow him to set interest rates lower or offer checking/debit accounts.
> loans to higher risk clients, sub prime lending then?
I was curious so I looked up the definition (well, Wikipedia). Turns out, you're correct. Lending to high risk clients is the key component of subprime lending.
What many people seem to think of is the high interest rates, unfavorable terms and other things which push subprime loans into the predatory loan category. It's entirely possible (though apparently hard here, with the restrictions on rates they could provide) to offer non-predatory subprime loans.