Not sure this is an aside or not, but I see a lot of big bank versus credit union in the comments, and that's just not really the case here in my opinion. I work for a large regional bank and I see a lot of similarities in this story to my own company, especially in the number of audits being requested and the rules they are having to follow (Bitcoin for one). I'll agree that a large part of the rules we have in place are self inflicted: some we asked for and some we caused in the aftermath of the financial crisis. These constant audits we've been faced with since the 2008 time period just chew up enormous amounts of time that we could better spend with innovattion and making the customer experience better overall. It's really unfortunate that his idea of creating a financial institution with real innovation is being stopped by bureaucracy that is probably 80℅ unnecessary regulation.
Difficult Times at Our Credit Union
91–100 of 158 posts
Re: Difficult Times at Our Credit Union
#92Earlier quoted context omitted.
I absolutely agree. I can see no reason for an individual to use a big national bank. I've always used small local banks or credit unions (I actually moved my accounts to a credit union when my local bank was acquired by Chase). This used to be quite easy to do, since you didn't have direct payroll deposit and never had to worry about covering more than your outstanding checks. Now, with all kinds of automatic transa…
>Now, with all kinds of automatic transactions most people have, you have to coordinate things a bit more carefully. I really hope this isn't the reason large banks have power (inconvenience of switching). With a whimper...
Its kinda a big deal. I have an account with the Credit Union at my university in the Midwest and now I live in Texas. If they had a better online banking presence I would ABSOLUTELY keep my money with them. But their presence on the web is sooo incredibly dated: https://www.uiecu.org/ASP/home.asp. (Its not just the UI and the draconic security measures; I fear that they don't have the right checks in place to prevent online fraud).
Meanwhile, Chase has a nice Android app which gives me instant information about all my transactions. They detect fraudulent transactions immediately. Auto-Pay for bills. Convenience and security wins.
Since this is all anecdotal experience: there was a period of time between jobs when they sneakily charged me $5 per month when I did not make a deposit in my checking account. So I do see the evil aspect is there.
Re: Difficult Times at Our Credit Union
#93My 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).
Honest question: Why can't there just be non-profit banks?
We don't have non-profits deliver most services because they wouldn't be efficient and/or couldn't raise capital from investors. And once investor come in, their profits are taxed. But there's nothing that in-principally stops a charitable organization from opening a non-profit car repair shop which runs with no net profit.
If, for whatever reason, it's feasible for non-profit banks to get started and operate successfully, why would we not allow them? (Please put "because the legislators are bought-off"-type arguments aside. What are the reasons people give?)
Are grocery co-ops limited in membership?
Re: Difficult Times at Our Credit Union
#94Earlier quoted context omitted.
I absolutely agree. I can see no reason for an individual to use a big national bank. I've always used small local banks or credit unions (I actually moved my accounts to a credit union when my local bank was acquired by Chase). This used to be quite easy to do, since you didn't have direct payroll deposit and never had to worry about covering more than your outstanding checks. Now, with all kinds of automatic transa…
>Now, with all kinds of automatic transactions most people have, you have to coordinate things a bit more carefully. I really hope this isn't the reason large banks have power (inconvenience of switching). With a whimper...
It absolutely is the reason, and was that way even before automatic transfers became common. I have left BoA three times, never having signed up as a customer. Every time I would move to a new bank, NCNB/Nationsbank/Bank of America would buy them and raise the fees. A few customers like me would leave, but enough would stay for the process to be profitable.
Read up on https://en.wikipedia.org/wiki/Hugh_McColl , the Genghis Khan of the US banking industry.
Re: Difficult Times at Our Credit Union
#95My 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 would probably calculate that it would be cheaper and easier to manipulate the regulatory environment to inhibit credit unions than to compete on honest terms
Would? No such calculation is necessary because banks are a state-maintained cartel everywhere - the opportunity for fleecing the masses with those sneaky & outrageous charges is just too delightful to pass up.
If people actually had a cheaper and better alternative, no one would keep paying those outrageous charges, and that's why the credit union 'had to be' "regulated"[1] to death.
Ever wonder why all banks charge roughly the same fees?
[1] "Regulation" is quite a double-speakey word. If you regulate an electric current, you make sure it isn't too strong, and that's where the word gets its positive connotation.
But when a government "regulates" anything, it's basically just coercion. "No, you can't offer people this beneficial service. You can't charge less for transfers. You can't give your customers debit cards" and so on.
> The only way for this system to be fixed starts at the ballot box.
Do you think politicians all over the world don't know that every single person on earth would rather not get fleeced with outrageous fees?
They all do, of course, and as evidenced by banks still raping us six ways from Sunday, they don't care.
Take any societal problem you see. Is there real evidence to show that they care? Whatever they tell you to get elected doesn't count, by the way. How often do politicians keep their promises?
Why would you think the solution to any problem would start at the ballot box?
Re: Difficult Times at Our Credit Union
#96My 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…
Is USAA considered a bank or credit union? Either way, they're easily the best financial institution in the US. They are amongst the most tech savvy because they only have a branch in San Antonio, yet their customers are deployed around the world. For those that don't know, USAA was originally setup only for military personnel and their families. Military families get screwed on credit and insurance because they are frequently moving. Their insurance rates were sky high, despite military bases being relatively low crime. So USAA stated offering insurance as a response. It's also non profit as they send you a rebate check every year for premiums minus losses.
It's a fantastic company that does great things because they want to help people, not grow huge profits. They were among the first to do ATM fee refunds (use any ATM), they never charged fees for using another ATM, were among the first with scanned check deposits, then smartphone camera deposits.
If you're eligible, you really should be using USAA. I prefer them even to the local SF credit unions.
Edit: I guess they are both a bank and insurance company.
Re: Difficult Times at Our Credit Union
#97Earlier quoted context omitted.
> The only way for this system to be fixed starts at the ballot box. Where are you going to find politicians to vote for who cannot be influenced by money? Not on your ballot, because the one-party-with-two-wings has effectively made it illegal to run a campaign as an alternative. Greens and Libertarians are kept from the debates, kept from the ballot with restrictive measures, and certainly aren't owning the machine…
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 currently have.
Re: Difficult Times at Our Credit Union
#98My 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…
Thanks for mentioning Mondragon, more people need to know about the world's largest federation of co-ops:
Re: Difficult Times at Our Credit Union
#99Earlier quoted context omitted.
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).
Honest question: Why can't there just be non-profit banks? We don't have non-profits deliver most services because they wouldn't be efficient and/or couldn't raise capital from investors. And once investor come in, their profits are taxed. But there's nothing that in-principally stops a charitable organization from opening a non-profit car repair shop which runs with no net profit. If, for whatever reason, it's feasi…
Why put those arguments aside when it seems like that is the primary reason why non-profit banks can not exist?
Re: Difficult Times at Our Credit Union
#100Earlier quoted context omitted.
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).
Honest question: Why can't there just be non-profit banks? We don't have non-profits deliver most services because they wouldn't be efficient and/or couldn't raise capital from investors. And once investor come in, their profits are taxed. But there's nothing that in-principally stops a charitable organization from opening a non-profit car repair shop which runs with no net profit. If, for whatever reason, it's feasi…
I'm not aware of any law precluding not-for-profit banks. E.g. USAA's banking arm is a quasi not-for-profit bank: http://www.theatlantic.com/business/archive/2012/01/in-the-e....