According to the PJ Tattler, OSF has filed papers to begin a new credit union partially specializing in start up loans to micro businesses. This is in contrast to the evil banks who routinely reject these risky loans unless the borrower can obtain an SBA guarantee (which means they have to have collateral, a business plan, etc.)
They will also be making loans to the poor and homeless as well as low interest student loans. I’m going to let that pass without comment. [grinding teeth]
The inevitable culmination of the Occupy movement has finally arrived: The protesters at Occupy San Francisco just announced that they are becoming bankers, by filing papers to form a credit union (for real — not satire):
Members of Occupy SF announced their ambitious plans to turn protesters into bankers by creating the People’s Reserve Credit Union, states Crediful, an expert credit watch group. According to Occupy SF’s Facebook page:
The goal of this project is to encourage San Francisco residents, businesses, as well as nonprofit and city agencies to keep their money out of the big banks and to redistribute that money locally. Initial services will include micro-loans for the working poor and homeless, and subsidized student loans at low interest rates.
The credit union is being created with the help of San Francisco’s Glide Community Church and Supervisors John Avalos and Eric Mar. The group filed its paperwork and has already crafted a thoughtful mission statement: The credit union will serve as a replicable model for other financial institutions to reinvest wealth in their local communities. They will support microenterprise, provide educational loans, and foster community improvement projects.
It’s all fine and dandy to start your own banking institution with good intentions, but at the end of the day, if you are hemorrhaging money due to risky investments, while calming depositors with the reassuring “Don’t worry, everyone’s money is safe in the hands of the students and homeless transients on our staff,” you’re not likely to last a year. That is, unless, you learn the hard way why banks do the things they do to survive and thrive, in which case Occupy SF will become the very “banksters” they loathe.
This sounds like a comical life lesson the 99percenters are going to learn except for one thing: When their socially acceptable credit union fails, and it will, guess who ends up holding the bag? Members at other credit unions. You.
Why is this? Because those depositors are going to be insured by the NCUA, just as bank depositors are insured by the FDIC. When it fails, the loans will still be uncollectible, but the depositors will be paid by the credit union insurance fund. That fund is maintained by fees levied on all surviving credit unions. Where will they get the money? The same place FDIC insured institutions get it: by reducing interest paid on deposits, increasing fees and increasing loan rates.
If you are a credit union member, you’ll get the great pleasure of providing the funds to reimburse some liberal San Francisco do-gooders who deposited their money in the OSF Credit Union of Failure. The same money the OSFCUoF
loaned donated to another HeadUpTheirNetherRegion liberal to start a microbusiness, probably specializing in the proper training of hamsters.
Will they get their charter? Probably. The banking regulators are a part of the executive branch and with the Obama Administration’s commitment to the 99percenters and the San Francisco lifestyle, I can’t imagine them turning it down. Just another Solyndra of the Ineptocracy.