While banks, mortgage companies and other lenders plead for help from the federal government, Arizona’s credit unions quietly continue making loans and safeguarding their members’ finances. Boasting a combined membership of more than 1.6 million Arizonans, nearly one-quarter of the state’s population, Arizona’s credit unions remain healthy and with strong balance sheets during the current economic downturn.
The big losses will always be from banks, because they are corporations, and as such, do not have individual responsibility for the actions of the whole. In other words, they can lose as much money as they want, and the only thing that will happen is that the corporation will fold.
Credit unions, on the other hand, are nonprofit organizations whose profits are returned to their members. They therefore are accountable in a way that banks are not, and, most importantly, profit is not their most important component, as it is with banks.
Banks are in it to make a profit, and so they will always lose big.
Credit unions are in it for their members, and so their decisions will always be more sound.
Points taken, but I would also point out that credit unions act increasingly like banks, as former Star reporter Scott Simonson pointed out in this story a couple of years ago.
And occasionally credit unions get in such deep financial trouble they are taken over by the National Credit Union Association, as Saguaro Credit Union was back in December 1998. This is what the regulators’ spokeswoman said of the Tucson credit union at the time: “The NCUA view is the credit union was being operated in an unsafe and unsound manner, specifically in regard to concerns with investment activity.”
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The big losses will always be from banks, because they are corporations, and as such, do not have individual responsibility for the actions of the whole. In other words, they can lose as much money as they want, and the only thing that will happen is that the corporation will fold.
Credit unions, on the other hand, are nonprofit organizations whose profits are returned to their members. They therefore are accountable in a way that banks are not, and, most importantly, profit is not their most important component, as it is with banks.
Banks are in it to make a profit, and so they will always lose big.
Credit unions are in it for their members, and so their decisions will always be more sound.
— Audra Koerber 07/29/2008 09:12 AM #
Points taken, but I would also point out that credit unions act increasingly like banks, as former Star reporter Scott Simonson pointed out in this story a couple of years ago.
And occasionally credit unions get in such deep financial trouble they are taken over by the National Credit Union Association, as Saguaro Credit Union was back in December 1998. This is what the regulators’ spokeswoman said of the Tucson credit union at the time: “The NCUA view is the credit union was being operated in an unsafe and unsound manner, specifically in regard to concerns with investment activity.”
— Tim Steller 07/29/2008 02:09 PM #