Notes from underground

يارب يسوع المسيح ابن اللّه الحيّ إرحمني أنا الخاطئ

Archive for the tag “credit unions”

How you too can participate in the financial crisis

About 15 (or was it 25?) years ago many building societies conned their members into agreeing to them turning themselves into banks. Was this the law of unintended consequences in action? Oh the joys of capitalism!

Bishop Alan’s Blog: HBOS: Personalised Credit Crunch:

Welcome to the share offer that enables you to have your very own credit crunch at home this Christmas. As a student I earned some holiday money and put it in the building society. Then the building society became a bank and my shares were converted into, er, more shares… Imagine my joy, then to be sent an “important document” this morning that “required my immediate attention.” It’s my opportunity to bail the bank out by taking them up on a very special offer — They are willing to flog me 261 shares, as a special favour, at only 113.6 pence a share. Here comes fate, tapping me on the shoulder, offering me a career as a major capitalist, and all for only £296-49! Deep Joy!

650,000 Americans Joined Credit Unions Last Month — More Than In All Of 2010 Combined | ThinkProgress

650,000 Americans Joined Credit Unions Last Month — More Than In All Of 2010 Combined | ThinkProgress: “One of the tactics the 99 Percenters are using to take back the country from the 1 percent is to move their money from big banks to credit unions, community banks, and other smaller financial unions that aren’t gambling with our nation’s future.

Now, the Credit Union National Association (CUNA) reports that a whopping 650,000 Americans have joined credit unions since Sept. 29 — the date that Bank of America announced it would start charging a $5 monthly debit fee, a move it backed down on this week.”

Now there’s an interesting thought.

The South African equivalent of a credit union was a building society, but the building societies all went commercial, turning themselves into banks in about 1987.

Building societies specialised in one thing — lending money for building and buying houses; in other words, mortgages. It was something they were actually quite good at, and something commercial banks are very bad at — much of the economic crisis of the last four years or so was caused by American banks playing fast and loose with mortgage finance.

So the news that Americans are moving their money to credit unions might herald the beginning of a return to sanity.

As I understand it, a credit union is like a general putpose building society, lending money not only for building and buying houses, but for other things as well. I believe that, like the building societies, they are cooperative rather than commercial.

Can South Africans do the same thing?

Are there any building societies left? Perhaps this is their opportunity to make a come-back. If anyone reading this knows of any South African bulding societies, please post a link in a comment. And revived building societies could even help to solve the housing shortage.

There are, of course, stokvels, but they usually have to keep their money in commercial banks, with the ever-increasing bank charges. I saw that my bank now charges R25.00 for a cash withdrawal.

That’s a good and sufficient reason to move my money to a building society… if there was one.

The importance of co-operatives

One of the factoids one often encounters is the idea that “socialism” invariably means state ownership, and that that is the only alternative to profit-driven capitalism. There are, in fact, various kinds of free-enterprise socialism as well.

The importance of co-operatives | Peter Lazenby:

The announcement that Labour will pump resources into the development of the co-operative movement if it is returned to power in the general election is to be welcomed. If the pledge is honoured the potential is enormous.

To appreciate the significance, we can learn from the history of co-ops in Britain over the last 170 years. It reveals not only the emergence of an unprecedented force for social change through worker ownership and control, but also the extent to which capitalist society in Britain felt challenged by such a movement.

Hat-tip to Nouslife: The importance of co-operatives.

More information is available on a blog devoted to Mutual Money.

In South Africa most of the building societies, and certainly all of the big ones, went commercial more than 20 years ago. They would have made good partners for the ANC’s hastily-abandoned Reconstruction and Development Programme (RDP), the only remnant of which is the pejorative “RDP houses” for a sub-standard jerry-built dwelling, built by commercial builders who have cut corners in construction to increase their profits.

Mutual life insurance cooperatives followed the building societies in demutualising a few years later, one of the worst being the “Old Mutual” — a deliberately deceptive name, since there is no longer anything mutual about it, and it should surely be called the “New Commercial”.

Post Navigation