Credit union members: Don't panic

Isn't anyone else concerned with comrade C R Keller's final comment: "If all of America were based off of the cooperative system, the consumers would be better off?"

All the taxes the banks claim they paid – returned in the form of "bailout money;" so they, like the credit unions, have not paid taxes. Even score!

Need other reasons for selecting Credit Unions over banks ?

Over the years, members of my family, my wife and I and others we know, have been defrauded by, lied to and lost much due to banks actions, in-actions, and even due to a bank refusing to take the proper I.D. and compare signatures from a check-fraud artist that led to much financial loss to my wife and I. The bank told us to "sue them…", and we found out that the bank was neither regulated by the F.D.I.C. or other Federal Agency, nor by our own State.

For five years now, we are proud members of and have an active voice in our local Credit Union, one that has been in constant proper operation since 1933.

Many banks are thieves in disguise, and being that banks are profit-making enterprises with boards of directors and usually other stockholders, we strongly suggest that many of our fellow citizens bring their personal and even small-business financial needs and activities to your trusted local Credit Union.

Credit Unions allow YOU to take an active voice in YOUR financial life and help others in your community as well.

Go CU !!

I am also a proud employee of a credit union. People – including bankers- should also be aware that credit unions are more highly regulated than any bank has ever been, to protect our member/owners, and thus insure that we are fundamentally safe and sound institutions. Credit unions aren't allowed to make the some kind of crazy loans and investments that got the banks in trouble – it would be against the interest of our members. Since when has a bank ever had the best interest of anyone other than it's shareholders in mind???

As I understand it, the problems the two Corporate Credit Unions are having stemmed from investments they made in mortgage backed securities, which USED to be considered good investments. (Who made all those mortgage loans, anyway?) Since many mortgages are in big trouble, those mortgage backed securities have lost a lot of value. So I don't really think that it was totally poor management that caused the problems at the Corporate Credit Unions. Just my two cents!

FYI,

• CU Premiums: The NCUA is raising insurance premiums by
about 100bps to cover the est. $6B cost of Friday’s takeover of
US Central Federal and Western Corporate Federal. The
agency had set aside only $4.7B to cover CU losses.

Oh John, you bankers are so transparent. Not only do you work for bank, you're on the Minnesota Bankers' Association's anti-credit union task force. "Grrr…let's get after those evil credit unions who claim less than 10% of the market-share…." Ridiculous. This is a prime example of bankers spewing out their rhetoric anywhere and everywhere, just hoping people will listen. Maybe you should focus the problems of your own industry and let credit unions worry about themselves.

John, having worked in all three, big bank, S&L, and now a CU CEO–there are other differences between Big Bank and the small CU. I still make loans for less than $1,000, set it up on weekly pmts, if that is what the Member/owner needs, let their weekly, bi-weekly payroll come in to make the payment. Also, by regulation, the highest interest rate in the house is 18%–can you say 38% at a bank? We also make a Pay Day Alternative loan at 18% —not 720%–of $300 to $500. When I was at the Bank, we would not look at a personal loan less than $5,000.

We serve member/owners of modest means. Get off the "level playing field" tick. Why does the ABA have as their greatest threats–credit unions ranked above terrorist–self serving to me.

I don't usually post, but this time I have to. Isn't anyone else bothered by comrade C R Keller's comment, "If all of America were based off of the cooperative system, the consumers would be better off"?

Credit union dividends are paid every month and are reflected in the posted rates they offer on savings and deposit products. Any expenses incurred from the conservatorship of the two corporates by NCUA are NOT going to make your credit union stop paying dividends. The credit union may record an operating loss for the year, lose some capital, and continue to operate just like before.

If a bank wishes not to be taxed, all it has to do is convert itself to a not-for-profit credit union. Ha ha, I don't hear any takers out there… Oh, I guess that's because they wouldn't qualify to feed at the federal trough anymore.

Some of you are not listening to what you are trying to make sense of…. Let's just say CU's paid taxes at this point it still won't matter because that money would be going back to the banks anyways. So CU's would be paying for the fault of all these greedy banks? Why? They cause this whole mess to begin with, CU's don't have to pay because they are not the ones needing to be bailed out! Hello!!!!

American Share Insurance is by far the healthiest deposit insurance fund in the United States. They only insure credit unions and do not have any in trouble or in need of financial assistance. ASI is owned by the credit unions it insures. ASI has never assessed one of its 150 member credit unions a premium to cover losses as NCUA is doing. ASI has no exposure to any mortgage related investment instruments that are hurting the entire banking industry and a few of the Corporate Credit Unions. You can read about ASI at their website http://www.americanshare.com

What a misguided and misinformed person "John the Banker" is. By this point, he's probably feeling pretty misunderstood too.

What I understand is a $700 billion+ bailout, John. What guides me to a credit union is knowing I own it, John. And I'm informed enough to recognize, John, that one should refrain from speaking unless one knows one's facts.

CUs are great. However, the NCUA is forcing the small ones to merge with larger ones. Looks like they're impressed by the mess that mega-banks have created and are busily fermenting their own disaster.

Guys, people like John are professionals in this industry, without their input or comments some of these stories arent worth squat because writer's are never correct or as informative as they should be.

Ah yes, here comes more uncertainty, doubt, and mis-information: Now Kieth from Jefferson City, MO wants us to believe that Credit Unions were established to benefit only their employees and family members. Frankly, that nonsense sounds a little like embezzlement. CUs are nothing like banks, banks are like corporations in that their purpose is to increase shareholder profit and that can mean taking money from the depositors so that, among other things, dividends can be paid to the shareholders. Think about that, money is taken from the depositors in the form of fees and paid out to the shareholders. Why would anyone with money in the bank put up with that?!? In short, banks are corporations where the best interests of the depositors are not necessarily in the best interests of the shareholders. However, the members of a CU own the CU and are very important to the managers of those CUs – shareholders of CUs do not exist, therefore, there is no conflict of interest between any shareholders and the depositors. Also, the government benefits because there is no conflict of interest, meaning CUs can be run more smoothly without disparate goals. (Read: CUs are not as likely to fail in large numbers….. Let's see, right now we the taxpayers are footing the bill to bail out banks to the tune of BILLIONS, and we put up billions to bail out the Savings and Loans in the early '90s as well. How many billions have gone toward bailing out Credit Unions?)

The bank industry is using tactics that the tobacco industry used years ago. Tobacco tried to spread doubt, uncertainty and mis-information about the tobacco-cancer link. They did so because they simply didn't have any science backing up their claims that cigarettes were NOT harmful. And now the bank industry is trying to throw nonsense, such as what's coming from Keith in Jefferson City or John in Brainerd, in the hopes that enough people will be confused and put up roadblocks in their (the bank industry's) favor. By taxing CUs the way banks are taxed, CUs would die a slow death and banks would have removed a major competitive threat – for no one's benefit but those of their shareholders. DON'T LET BANKS SPREAD THIS KIND OF MIS-INFORMATION!!!!

Kind of agree with both sides.. I love my CU, however dont feel they give any real benefit in rates and fees than a bank. Additionally, I feel they should pay taxes like I do.

John Forrest, Brainerd, Minnesota, it is obvious to all of us that you work for a bank. Frankly, I really don't care, your comment was out of line. So here is how I see it. I have shopped around time and time again, and routinely, credit unions are the best option over banks. Banks have grown in love with charging fees for everything from simply having a checking account, to making withdrawls. They have even figured out how to charge an insufficient fee based off of projected (not actual) balances. The consumer gets nickeled and dimed by you guys. Now we get to bail you and your cronies out. All the while, I bank at two credit unions. News for you, they are not getting a bail out, nor do they need one. I own shares in each since I bank there, and I get a dividend, few fees, and better rats. Beat that!! If all of America were based off of the cooperative system, the consumers would be better off.

John, it appears you have hit a nerve. The greed of the banking system is becoming more transparent every day. Meanwhile, your local credit unions have kept plugging along, doing what is right day by day. I proudly work for a credit union, and serve my members daily, not some shareholder looking for value. The tax burden on our members is the same as the tax burden on the shareholders of any corporation, including your bank.

Credit Unions fill an important niche left vacant by banks decades ago. I applaud those that have stood by your local credit union, and challenge you to continue to do just that. We won't leave your side when things are tough and we are focused on what is best for you, the member. John, is the customer's best interest anywhere in your mission statement?

The media is completely ignoring the fact that each individual credit union that is a member of the communal network is being assessed money to replenish the fund used to bail out the 2 failed wholesale credit unions. It means no profits for the majority of these other credit unions and, because CU's are member owned, there will be no profits distributed this year in the form of year end dividends etc.

Who is this mis-informed reporter that wrote this article? Not a big deal? Would you consider it no big deal if the Federal Reserve Bank of New York failed? After all, "it did not actually serve consumers directly."

Oh, sure nothing to worry about here. This is just akin the a Federal Home Loan Bank failing. Retail Credit Union's only depend on these entities for their liquidity and funding. Who needs that? Not to mention that the USCCU failure is the third largest institution (Banks included) to fail in history, and by far the largest CU entity…but don't worry. By the by, how much does the NCUA have in its coffers??

John Forrest of Brainerd S&L –

PLEASE, update your website. That site looks like it is as old as your bank (great depression era).

John; who is getting FAT in the CU world? CU's have no stock holders to make FAT. CU's are all about returning lower loan rates, higher dividend rates and lower fees back to their membership. They have not been taxed because they are not for profit and not for making anyone stock holders rich. Anyone who does not understand this concept must be a banker.

I just want to point out the "bail out" of the Corporate Credit Union network is not being funded by the Tax Payers, as are the banks, but by the Credit Unions themselves. Isn’t it a breath of fresh air that someone is taking responsibility and accountability for their actions?

Credit Unions were establised to benefit its employees and family members..Now anyone can join a credit union. And if they want to act like banks …..They to should be taxed just like banks……

Good news to be sure. I happen to be a member of one the best around. Darn fine people and count me as a very satisfied customer.

Well, it would appear that "John Forrest from Brainerd, Minnesota" either works at or otherwise owns a significant portion of a bank, because any well-informed individual can understand that credit unions are most decidedly NOT ripping off American taxpayers. Credit Unions are owned BY the members who deposit their money in the credit union. The purpose of a credit union is to safeguard the savings of the members – the purpose of a bank is the same as any corporation: to increase the shareholders' value, which can be the opposite of safeguarding one's deposits as has become painfully obvious in recent months…. In other words, we (the American taxpayers) are bailing out failed banks because of their risky behavior whereas the vast majority of credit unions are doing just fine.

Oh wait, he's the President of Brainerd Savings and Loan. I'm sure your Marketing person is going to love you.

I have a Citi M/C and a Credit Union Visa card.
My M/C interest just went from 16 percent to 20 percent.
My visa card interest is 8 percent.
Both cards are with a ZERO balance.
Both have always been paid off on time.
Thank God for credit Unions.

Hey John Forrest, are you the same John Forrest on the Minnesota Bankers Association and part of Brainerd Savings and Loan? what a coincidence you would make a comment like you did! It figures you would make negative remarks about Credit Unions that are Not-for-profit organizations, without shareholders, their members own the institution and don't pay their board members while you S&L bankers sit back and feed off your customers every which way you can while ripping off the American public with your hands out. So while you complain about unfair taxes you and your fellow bankers in Minnesota have no problem ripping off the hard working American with deception and lies while taking in huge salaries not to mention coming from the same group that lent more money than they should have in the Savings and Loan disaster. Can you still look at yourself in a mirror? Shame on you! Join a Credit Union today folks you're money's insured and do you really want to listen to anyone from a bank or S&L at this point? I think not.

John works for Brainerd Savings and Loan. Apparently CNN didn't like my last post.

Chris, you can read here that the NCUSIF
http://en.wikipedia.org/wiki/National_Credit_Union_Share_Insurance_Fund provides a NCUA administered, government backed, federally insured fund that protects deposits up to $250,000 much like the FDIC does for banks.

John Forrest from Minnesota, are you kidding!?! Credit unions are member owned. In other words, credit unions are owned by the taxpayers not banking industry theifs. Are you seriously suggesting that taxpayers should be outraged that they are not being forced to pay higher taxes? Get a clue genius!!!

Folks… it's true that Federal Credit Unions don't pay Federal, State, or sales tax… but neither does any business… only their customers can pay these taxes. Think about it, no business, no taxes.

So do business with a bank and you'd get to pay their tax bill too… in addition to paying their outrageous fees and suffering their generally poor service.

The difference between a bank and a credit union, Mr. Forrest, is that the credit union is member owned. There is no stock issued. Banks can convert to a credit union any time they want. Historically, credit unions have performed better because they don't offer all the boutique products that conventional financial institutions attempt to sell (rather poorly, I might add.)

nice catch, John.

the flip side of "why don't credit unions have to pay taxes" is this: –

why does America try to tax corporations at all?

Corporations, including banks, do NOT, in the end, pay taxes. They are financial passthroughs, not real people. All of the 'taxes' the banks and corporations collect on behalf of the governments is money actually taken away from some real person — depositors (because interest rates paid are too low), employees (because wages are too low), and/or owners (because dividends and share prices are too low).

Sure, the depositors, employees, and owners jockey for who ends up paying the taxes — and the ones with the least bargaining power end up losing the contest.

Oh, great. The littlest ends up losing again! Wouldn't ya know — government ends up hurting the weakest once more.

Dang, but if it wasn't for government, the country might actually work.

What? you don't believe that?? Guess again — America's real growth rate [which is the evidence that your children and grandchildren will be better off than you are] was highest BEFORE income taxes, BEFORE big government, and BEFORE heavy regulation of what we can and can't do.

That is, back when government was small and the Supreme Court killed many unequal programs and taxes as unconstitutional. [Before 1915, in other words.]

=)

Now John how much taxpayer money has been funneled into the commercial banking industry lately? A bit more than $1.45 billion I would say. Taxpayer outrage is properly placed at the feet of the commercial banks. Leave the credit unions alone.

I think the 3rd poster must be a banker. They HATE credit unions…
Aren't you the pot calling the kettle black!

Well, John, the churches and the post office also operate "tax free". I have no problem according the "cooperative" approach to banking tax free status as well. I wonder what happens to these exclusions under the FairTax.

Low fees, yes. As far as having good rates, I think your mileage may vary. My CU has great CD rates, but I can do better for mortgages elsewhere. There is just no substitute for doing your homework.

They should pay taxes like the other financial institutions, however they won't. You know why? One of the largest credit unions is the one Members of Congress are in. You want to talk about tax payer rip off. The Farm Credit System does not pay taxes ether.

John Forrest is of course a Banker with the Brainerd Savings & Loan Association. We all remember Savings & Loans, don't we? We should people be outraged at our not for profit status? Credit unions serve shareholders which are their members, not the bankers on Wall St and investors. It's sad you should be bashing instead of posting a way to help out people in need. That's so typical of banks.

Well John, the American taxpayer isn't outraged because the profits from credit unions are given back to credit union members in the form of lower fees and better interest rates. You may also want to consider how much money the government has been pouring into the banking system and you will find it pales in comparison to the $1.45 billion. By the way, which bank do you work for?

the way credit unions are structured is entirely different. their motive is not for profit but rather member focused. if you bank with some like b of a or wells they aren't accountable to you but rather their shareholders. increased fees for everything. credit unions are accountable to their members (customers) and to the benefit of them. If you read their charters or bylaws you will understand.

Are you joking? It was the corporate credit unions that screwed up here, not the natural persons credit unions. Learn something before you start ranting.

While the big wall street goons went crazy, most credit unions were just chugging along serving their communities, protecting their members and helping them with sound financial advice. If they are having any problem it's because of these ridiculous corporate credit unions who got involved in mortgage backed assets. The regulators should all pay for this.

Hey John…what bank do you work for?

John: The difference is Credit Unions are not for profit, thus their tax-free status. Most don't pay their executives extremely high compensation, they give all gains back to their members through lower rates, dividends, etc.

Banks have never been a not-for-profit enterprise, thus why they are taxable. As for the $1.45 Billion, its a drop in the hat, if credit unions had to start paying taxes, it would be neglible impact to most.

Don't panic Goldman is in control

What about credit unions that are not federally insured but rather insured under American Share Insurance (ASI)? Is there any cause for concern regarding these credit unions?

The real story should be about how credit unions are ripping off the American taxpayer with their tax free status. Credit union have become no more than a bank in drag getting fat on a taxpayer subsidy estimated to be $1.45 Billion in 09 alone. This doesn't include the state income tax they don't pay and, if they are a federal credit union, the sales tax they don't pay. Talk about corporate welfare! The American taxpayer should be outraged.