Make banks follow credit union model

I have a couple of friends who have a pretty good slant on the current economic bailouts. I am just the spokesperson here, but I think the ideas have a lot of merit.

The first is that all the banking bailouts should be done on a non-profit basis, just like credit unions. By taking the greed/insanity/incompetence factors out of the system the loans will be made on the basis of regular, sound lending practices. This is typical of our credit unions. They don’t seem to be in the same fix and their management doesn’t “earn” multi-million-dollar salaries.

The second goes deeper and would require the government to actually want to help people get out of debt. Again, all the bailout money should be put into federal credit unions — if they don’t exist, then set them up on a regional basis. The loans could be for mortgage problems, small business or personal debt management. The rates would be lower and affordable, because the returns go back into the credit unions — essentially owned by the investor — the taxpayer citizen! Case in point — GMAC gets a bailout and immediately restarts the “free-ride” business model. Where did the money go?

Again, credit union models seem to work. Good rates for qualified borrowers with qualified lenders and old-fashioned sound practices. Not for profit and all with our own money to help ourselves. How about it, Mr. Obama? At least until we can get ourselves out of this deepening hole?

Andy Branca