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Difficult Times at Our Credit Union

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Re: Difficult Times at Our Credit Union

#141

Post by dragonwriter »

jessriedel wrote: post #138
dragonwriter wrote: post #119

Earlier quoted context omitted.

> Honest question: Why can't there just be non-profit banks? There can be. If you mean, why can't there be "tax-exempt non-profit banks", the reason is because the tax code doesn't allow it (though no-capital-stock member-owned banks seem to be effectively untaxed, except on transactions subsidized by federal assistance to such banks, if they actually distribute their operating surplus to demand deposit accounts of t…

I must be unaware of an important distinction here. Non-profits don't pay taxes, so non-profit banks are automatically tax-exempt, right? (Put aside issues of tax-exempt status of donations to non-profits; credit unions don't take donations.) Maybe here's another way to formulate my question: why can't a credit union operate as a for-profit bank, but just structure their company so that it's committed to never earnin…

> Non-profits don't pay taxes, so non-profit banks are automatically tax-exempt, right?

Tax-exempt non-profits are a subset of organizations not organized for profit. To be tax-exempt, an organization must not only be not-organized-for-profit, it must also meet the qualifications of one of an enumerated list of categories of tax-exempt non-profits in the Internal Revenue Code.

> Maybe here's another way to formulate my question: why can't a credit union operate as a for-profit bank

Because then it would be a "bank" and not a "credit union".

> but just structure their company so that it's committed to never earning a profit and hence never paying much taxes?

An organization structured like that is a mutual savings bank; as the return of surpluses via demand accounts (the same way a credit union typically returns surpluses) is tax deductible for them, as discussed upthread, it is quite possible to have a bank (rather than a credit union) that returns surpluses to members like a credit union and is effectively untaxed (it looks like a mutual savings bank that didn't retain surplus profits would be untaxed except on things for which it received federal subsidies as a mutual savings bank.)

> Why do credit unions bother to satisfy the legal requirements of being credit unions?

Because the legal requirements for starting a bank are pretty hard, too (whether legitimately to protect people from bad banks, or as protectionism through regulatory capture by incumbents, whatever, the barriers are there), so while the rules are slightly different for credit unions, you don't actually make your job easier by trying to start a bank-to-operate-like-a-credit-union.

Re: Difficult Times at Our Credit Union

#142

Post by rm_-rf_slash »

kbenson wrote: post #136
rm_-rf_slash wrote: post #134

Earlier quoted context omitted.

In case you missed the flagged comment, my case was with the way that comment was presented, in which the parent commenter's request was dismissed as political correctness without any consideration to context. Therefore, trivializing.

I saw it, but I took your comment "trivializing sexual assault" as also applying towards your reasoning for the statement "I also resent your use of 'rape' in that context." and my comment was meant to address both.

Right. I just think rape is talked about too lightly, and when people do so it reflects poorly on them.

Some things simply aren't appropriate to do in a public space, like nose-picking. It's not that they should be forbidden, but it won't win you many friends.

Re: Difficult Times at Our Credit Union

#143

Post by smcl »

rayiner wrote: post #132
smcl wrote: post #102

Earlier quoted context omitted.

Banks are rarely small institutions - even the smaller ones will have dozens of people employed whose sole job is to handle regulatory compliance (UK finance perspective here)

So what? Difficulty with regulatory compliance is intrinsic to being a small entity. That doesn't mean the regulations are stacked in favor of banks.

So "tough luck if you're the little guy" basically? Seems a little unfair no?

Re: Difficult Times at Our Credit Union

#144

Post by jessriedel »

dragonwriter wrote: post #141
jessriedel wrote: post #138

Earlier quoted context omitted.

I must be unaware of an important distinction here. Non-profits don't pay taxes, so non-profit banks are automatically tax-exempt, right? (Put aside issues of tax-exempt status of donations to non-profits; credit unions don't take donations.) Maybe here's another way to formulate my question: why can't a credit union operate as a for-profit bank, but just structure their company so that it's committed to never earnin…

> Non-profits don't pay taxes, so non-profit banks are automatically tax-exempt, right? Tax-exempt non-profits are a subset of organizations not organized for profit. To be tax-exempt, an organization must not only be not-organized-for-profit, it must also meet the qualifications of one of an enumerated list of categories of tax-exempt non-profits in the Internal Revenue Code. > Maybe here's another way to formulate…

>> Why do credit unions bother to satisfy the legal requirements of being credit unions?

> Because the legal requirements for starting a bank are pretty hard, too

So then the point of being a credit union, ultimately, is just to avoid the legal requirements of starting a bank? And it really has little to do with tax-exempt status? Elsewhere in this thread people have said the opposite. rayiner, above:

> 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

#145

Post by Goronmon »

smcl wrote: post #143
rayiner wrote: post #132

Earlier quoted context omitted.

So what? Difficulty with regulatory compliance is intrinsic to being a small entity. That doesn't mean the regulations are stacked in favor of banks.

So "tough luck if you're the little guy" basically? Seems a little unfair no?

Sure, it's unfair. But your argument for loosening regulations can't just be "It's too hard for small businesses." I'm sure things like health and safety violations are a burden for small businesses, but they don't get to opt out because solely because they are small.

If you can make the argument that specific regulations offer no benefit other than to protect larger businesses that's one thing. But "It's hard" isn't convincing enough to me.

Re: Difficult Times at Our Credit Union

#146

Post by rodgerd »

rayiner wrote: post #76
rm_-rf_slash wrote: post #54

Earlier quoted context omitted.

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.

So? Should Linux Torvalds have been required to charge money for his code because it might drive crappy Unix vendors out of business?

Re: Difficult Times at Our Credit Union

#147

Post by kbenson »

rm_-rf_slash wrote: post #142
kbenson wrote: post #136

Earlier quoted context omitted.

I saw it, but I took your comment "trivializing sexual assault" as also applying towards your reasoning for the statement "I also resent your use of 'rape' in that context." and my comment was meant to address both.

Right. I just think rape is talked about too lightly, and when people do so it reflects poorly on them. Some things simply aren't appropriate to do in a public space, like nose-picking. It's not that they should be forbidden, but it won't win you many friends.

And I understand that stance, I'm trying to point out that if you have that stance, you should also condemn talking lightly about murder (which you might), and if you don't, I think that requires justification, or a reexamination as to why rape is treated differently than murder. It's possible that it may be because of people pushing a (well intentioned) agenda.

My personal view is that there is a misalignment here, and when these terms are used to describe something clearly as a metaphor then they should be treated similarly (or murder should be treated as the worse of the pair). I don't really care whether that means they are both taboo or both acceptable, but treating rape as taboo to use as a metaphor and murder as not is clearly inconsistent, given that murder is undeniably the worse crime.

Re: Difficult Times at Our Credit Union

#148

Post by terinjokes »

Sidnicious wrote: post #26

I have checking and savings accounts at the Internet Credit Union but I don't use them. - I'm in NYC. ATMs that don't take a surcharge are few and far between. There are two near my house, at a McDonald's and a bodega. According to the locator, only one ATM in all of Manhattan takes check deposits. An iPhone app called CU24 ATMs can find them (be sure to switch the filter to "surcharge-free ATMs" because by default i…

I switched from Chase to Charles Schwab Bank. Decent mobile app, can take pictures of checks to deposit them, can use any ATM without fear of surcharges, I've got checks should I need to use them, great customer service, and works with the online budget management software.

Probably a lose leader to the investment products, which you don't have to use, but I'm extremely happy.

Re: Difficult Times at Our Credit Union

#149

Post by jcheng »

Sidnicious wrote: post #26

I have checking and savings accounts at the Internet Credit Union but I don't use them. - I'm in NYC. ATMs that don't take a surcharge are few and far between. There are two near my house, at a McDonald's and a bodega. According to the locator, only one ATM in all of Manhattan takes check deposits. An iPhone app called CU24 ATMs can find them (be sure to switch the filter to "surcharge-free ATMs" because by default i…

This kind of stuff is why I'm with Bank of America. I tried switching to First Tech Credit Union (besides being a CU they also have chip-and-pin credit cards that work well in Europe). Their website is just terrible. The last straw was when I found out I can't pay my First Tech credit card with anything but a First Tech checking or savings account.

I wasn't able to use Simple either, as I'm married and even after all these years they don't support joint accounts: https://www.simple.com/help/articles/account-info/shared-acc...

Re: Difficult Times at Our Credit Union

#150

Post by dragonwriter »

SeoxyS wrote: post #97
rm_-rf_slash wrote: post #85

Earlier quoted context omitted.

This is how our political system wants us to feel: ineffectual and powerless. Don't bother voting because none of the options are good. The system can't be fixed so you shouldn't even bother. You end up falling into the trap they set for you. I refuse to give up on democracy, just as I refuse to give up on America.

The USA is not a democracy, it's a representative republic. That's the fundamental difference which means that you can't simply go to the ballot box to fix something. You can go to the ballot box to support people who you believe share your values. Sometimes it works, oftentimes it doesn't. Unfortunately, it's unlikely that the USA will ever become a real democracy, so we have to make the best of the system we curren…

> The USA is not a democracy, it's a representative republic.

The US (by Constitutional form) is both a (representative) democracy and a (federal, and democratic) republic.

> Unfortunately, it's unlikely that the USA will ever become a real democracy

You seem to be using "real democracy" to mean "direct democracy", buy direct democracy is no more real than representative democracy. (And there's a good case to be made that the problems the US has with being an effective democracy are curable while remaining a representative democracy, and that the problems lie largely in the particular electoral system.)

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