Welcome to CUSoapbox Bank- We're getting in line for bailout money!

by Ron Daly 

You heard it here first, ladies and gentlemen. CUSoapbox - which stands, of course, for "Credit Union Soapbox - has become its own BANK. 

Banks, we've decided, are great. We've decided this because we know that four insurers are buying up banks to get access to bailout funds. Yes, it's just that easy to get hold of a slice of the $700 Billion pie. What's even more impressive is that a cluster of funds this large comes with loopholes. 

Don't get us wrong - we love Credit Unions. Love 'em. But as it stands, CUs just aren't getting that same level of love from the Magnanimous Mr. Paulson at the Treasury. See, the NAFCU and CUNA are trying to get ahold of just a little corner of that TARP - something like $50 Billion of the $225 Billion left allotted for this year.

But $50 billion is $50 billion and, even stacked against a number fourteen times its size, that's a lot of money. Money that the treasury is already spending on the 34 largest banking institutions in the country. 

from the Wall Street Journal: 

To kick off Tuesday's expected announcement, the government is set to buy preferred equity stakes in Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co., Bank of America Corp. -- including the soon-to-be acquired Merrill Lynch -- Citigroup Inc., Wells Fargo & Co., Bank of New York Mellon and State StreetCorp., according to people familiar with the matter.

You see, credit unions aren't getting a lick of the ol' brass ring here. So we've got to be banks! If you want us to set you up with a checking account or get your car loan going, however, you're going to have to wait: CUSoapbox Bank won't have any money until we get our bailout check.

Comments

[Andy LaFlamme]

Keep that dirty money away from CU's. We've worked so hard to portray ourselves as solvent and secure. The only thing getting TARP money (in any amount) will do is discredit all the credit unions that DON'T need a bailout (nearly all of them) and are proud of it.

We should be turning our back on bailout money, standing on our own, and truely proving that we are different and that the credit union difference really matters.

[Ron Daly]

Hey Andy,

Why do you think CUNA, NAFCU and NCUA are fighting so hard to keep credit unions in the ~ $800 billion dollar TARP bread line?

Welcome comments from others out there that might know too.

[Matt Vance]

Is there anywhere we can tell CUNA, NAFCU or NCUA that we in the trenches think it's a bad idea and would like see if we can find a solution on our own?

[Andy LaFlamme]

Ron, I really have no idea why they are fighting so hard to get on the TARP bandwaggon.

Maybe after years of fighting to be equal to the banks they've lost sight of the fact that not everything banks get is good for credit unions and are fighting out of reflex.

[Elliott]

The only owners of credit unions should be members, not the government. Now, if the Treasury meets the membership requirements, joins, and then gets a share savings account, then we'll talk.

[Ron Daly]

Matt,

We research for a way to communicate with the folks at CUNA, NAFCU and NCUA at the same time but didn't find one. So we created one for the guys in the trenches to post their issues. Here is the first CUSoapbox "Town Hall Comment Board"

cusoapbox.com/tarp-townhall.html

[Credit Union Warrior]

Step away from this issue for a moment and think about the message that accepting TARP funds will send to the public.

Here's what it would say:
1) We were part of the problem. The vast majority of credit unions have been responsible lenders and responsible investors. Accepting TARP funds communicates the exact opposite.

2) We truly aren't different than banks. Insiders know there is a difference. Members know. But the majority of Americans do not know that there is a credit union difference. This current financial meltdown gives credit unions a perfect opportunity to stand up and prove that we ARE different. Our structure is different. Our way of doing business is different. Our purpose for doing business is different. TARP funds would undo every effort made by the movement to communicate these distinctions. Credit unions take great pride in knowing that we have never asked for one single taxpayer dime to bailout any of our institutions. Our independent formation of the NCUSIF shows that we are dedicated to being self-sufficient, responsibly managed, and trustworthy with member-owned assets.

3) That credit union tradition, philosophy, and principles mean nothing. OK, this point is more for insiders like me who still believe that the dreams of Filene, Desjardins, and Raiffeisen are still alive in the movement. There are a million professions to which I could apply my talents. I choose to work in credit unions because I think they stand for something more powerful than profit. I take pride in knowing that it's OK to turn down a loan that is not in a member's best interest. I have a fulfilling day when I know that I helped a member set up a systematic savings program that will turn his/her life around. I am satisfied that, though I could make more money working at a bank, I am working for something just, pure, and for the common good. I would sooner sell encyclopedias door-to-door than work for a credit union that tarnishes the movement's reputation for short-term gain.

CUNA and NAFCU are noble organizations who have protected credit unions uncountable times from banker attacks and unfair legislation. My personal view, however, is that instead of campaigning FOR credit union inclusion in TARP, they should reject it for what it is: a misleading indication of credit union wrong-doing, a violation of taxpayer faith in the movement, and a rejection of the principles of mutual self-help that have made our cause so noble.

[Andy LaFlamme]

@CUWarrior

Awesome comment, you hit the nail right on the head.

This whole crisis has given us the opportunity to build a reputation; to live up to our philosophy and really demonstrate that to the average person.

By accepting TARP money we would be destroying all the "street cred", so to say, that credit unions have been trying to build with the American public.

[Sherry]

On one hand I am darn proud to say that credit unions are not part of the bail out with their hand out, nor should we be. This is our greatest opportunity to stand out and say NOT ONE credit union took taxpayer money because we always act fiscally responsible! On the other hand, it kind of feels like we've been dissed once again.

I don't want them to offer us the money, I want them to stand up and say "Not one Credit Union NEEDED to benefit from this money".

NCUA and CUNA should be standing up to say "WE DON'T WANT IT". I agree, this is one place we don't want equality by any means!

[Dan Thornton]

I certainly agree that credit unions should not be on the government dole, but I am convinced that the opinion of the majority does not matter. For example, it seemed evident to me that the majority of Americans did not favor the bailout proposal, but congress approved it anyway. I am now sure that the majority of the credit unions would not support credit unions accepting bailout money. However, NAFCU and CUNA do not represent the opinions of the majority and will support the bailout for credit unions at any cost. What is needed is a mechanism that allows the will of the majority to be adhered to. After all, we are a democratic society.