View Full Version : Credit union question

My Pants Are Cold
5th October 2008, 14:26
How will credit unions be effected by "all this"?

5th October 2008, 14:44
Providing they are exercising proper procedures, and doing everything on the up and up, they will be less affected than privatized banks. Credit unions have a completely different lending structure than banks, therefore, reducing the fractional liability. They're "owned" and controlled by their members for a very "organic" purpose. If I'm wrong, somebody will speak up, hopefully.

5th October 2008, 14:47
From Wikipedia:


A credit union is a cooperative financial institution that is owned and controlled by its members, and operated for the purpose of promoting thrift, providing credit at reasonable rates, and providing other financial services to its members.[1] Many credit unions exist to further community development[2] or sustainable international development on a local level.[3] Worldwide, credit union systems vary significantly in terms of total system assets and average institution asset size[4] since credit unions exist in a wide range of sizes, ranging from volunteer operations with a handful of members to institutions with several billion dollars in assets and hundreds of thousands of members. Credit unions nonetheless remain typically smaller than banks with, for example, the average U.S. credit union having $93 million in assets versus $1.53 billion in assets for the average U.S. bank, as of 2007.[5].

The World Council of Credit Unions (WOCCU) defines credit unions as "not-for-profit cooperative institutions."[6] In practice however, legal arrangements vary by jurisdiction. For example in Canada credit unions are regulated as for-profit institutions, and view their mandate as earning a reasonable profit to enhance services to members and ensure stable growth.[7] This difference in viewpoints reflects credit unions' unusual organizational structure, which attempts to solve the principal-agent problem by ensuring that the owners and the users of the institution are the same people. In any case, credit unions generally cannot accept donations and must be able to prosper in a competitive market economy.

Credit unions differ from banks and other financial institutions in that the members who have accounts in the credit union are the owners of the credit union[8] and they elect their board of directors in a democratic one person-one vote system regardless of the amount of money invested in the credit union.[9] A credit union's policies governing interest rates and other matters are set by a volunteer Board of Directors elected by and from the membership itself.[10] Credit unions offer many of the same financial services as banks, often using a different terminology; common services include: share accounts (savings accounts), share draft (checking) accounts, credit cards, share term certificates (certificates of deposit), and online banking.[11] Normally, only a member of a credit union may deposit money with the credit union, or borrow money from it.[12] As such, credit unions have historically marketed themselves as providing superior member service and being committed to helping members improve their financial health. In the microfinance context, "[c]redit unions provide a broader range of loan and savings products at a much cheaper cost [to their members] than do most microfinance institutions."[13]

5th October 2008, 15:24
It sounds to me like forming small, community based credit unions, independent from the typical banking system would be the way to go then, for any community hoping to avoid bank meltdowns and whatever the future will bring in commercial banking policies.

It's not an immediate solution, of course, should the banks close their doors. Never-the-less it sounds like a good community goal.

5th October 2008, 15:32
I dunno, but Gerald Celente and Andy Gause seem to think credit unions are next to fall,,,,,,,,,of course many more banks will go first