Another Credit Union gone to the wall...

5% reserves being retained profits is HIGHER than the Banks Basel III at 3% putting it as 'capital' as % of total assets.
The 10% was made up and based on nothing.

The shares should be deemed deposits and those wishing to own the Credit Union should take shares.
Thats for Darag who may not have understood what was meant.
 
Wizard, so do you accept that the requirement that an officer have responsibility for compliance is reasonable? You seemed pretty adamant earlier that this was an oppressive requirement for organisations handling millions or tens of millions of the publics savings.

Thanks for the clarification. So your big idea is that CUs be allowed issue shares separately to savings and presumably pay the shareholders profits? This would be a complete departure from the current structure/ethos - I don't think it would be appropriate to call such an institution a credit union. And I fail to see how this would have saved the high profile CU collapses we've seen.

Regarding your objections to the reserve requirements, what level do you think would be appropriate? And would this level have saved this or other failed CUs? 10% does not seem onerous to me. Some counties are insisting on higher ratios than this for large retail banks.
 
Darag - reasonableness is fine. What the Act says is completely different and I showed the quote. The Act does not mention the word reasonable in that section at all - it states "...(a) ensuring that the credit union complies with all statutory and regulatory requirements ...." In simple terms this is way outside just the Credit Union Act. What I saying is only people that do not understand the law could put this type of Section in and only those that also dont understand the law would also see it as reasonable.

The 10% RR was made up. Name another institution in the world with a 10% RR.

As for the Shareholding - let the ownership be with those that are prepared to take part in running it.

The Central Bank simply does want the Credit Unions in the stable. It must kill them the small number that have apparently failed. Is it five or six?
 
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