Me and the Iron Lady

April 9, 2013 at 7:18 am Leave a comment

imagesCAWUYAYMHow does a guy whose favorite living politician was Margaret Thatcher end up working for credit unions and bashing the banking industry?

The truth is that once you get past the occasional pony tail and penchant for blazers instead of suits, credit unions have more in common with the conservative values advocated by Margaret Thatcher, and to a slightly lesser extent Ronald Reagan, than today’s tax cutting idealogues ever will.  Here’s why.  In the mid-1970s, Great Britain was not simply facing a gradual economic decline, but was in danger of becoming a third-rate economy.  An excessively regulated and militarized workforce had taken away the ability of businesses to grow and earn a profit.  When Margaret Thatcher famously proclaimed that there is no society, only individuals and families, she may have been engaging in a bit of rhetorical overkill, but her basic point was that the individual and not government was the key to economic growth and general prosperity.

This is where credit unions come in.  There is certainly a communal aspect to credit unions, but ultimately it is communalism based on the idea that every individual is not only deserving of a chance at economic independence, but can be held accountable for failing to live up to his or her end of the bargain.  This is why a member who causes a credit union a loss isn’t entitled to the same rights as those members that don’t.  And it is one of the main reasons why credit unions suffer fewer losses on their loans than commercial banks.  We’re not against literally calling up an individual and telling him that he is letting down his fellow neighbors and investors who had enough faith in him to lend him some of their money in the first place.

Now compare this to the current banking structure.  My primary gripe with the CFPB isn’t with its drive for additional regulation but with the implicit premise that the average American is a victim who should not be held accountable for his or her financial mistakes.

Let’s look at the big banks.  No true conservative believes that institutions that are too big to fail are good for capitalism, which is why George Will supports proposals to break them up.  And one more thing, which institution is truly more conservative?  Credit unions argue that by minimizing their tax burden they can better help their local communities and fellow employees; in contrast, the captains of capitalism acting through the American Bankers Association argue that it is more important to impose taxes on credit unions than it is to allow them to help their communities.  That doesn’t sound very conservative, does it?

Entry filed under: General. Tags: , , , , , , .

Cash, we don’t need any stinking cash. . . The Mother of All Mandates

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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