ABA Economist: CU Members Are Suckers Posted by AVCU on 12:19 PM

Well, he didn't directly say it but Keith Leggett, senior economist at the American Bankers Association, certainly infers it in his latest "Credit Union Watch" blog entry. He rants about how credit unions promoting ownership by their members is really a hollow ownership. On members ownership of their credit union, Leggett cites a quote from an Amercian Banker article by researcher Alex Pollock:

It can’t be sold. It has no market value. It can’t be redeemed. You can’t borrow against it. You can’t take it with you when you switch your account to another financial institution. Theoretically, you could get a distribution of any remaining net assets upon liquidation of the credit union, but if successful, it will never liquidate.

Leggest claims that a credit union would only liquidate if insolvent, which negates the value of ownership, and that the only thing of "value" to members that they don't get banks is the right to elect the board members, which he also pooh-poohs because your vote is only worth as much as everyone else's no matter how much business you do with the credit union. Leggett's ultimate statement on the worth of ownership held by credit union members is his final comment:

P.T. Barnum is probably smiling from the grave.

For more ABA perspectives on credit unions like "Credit Unions Gone Wild," "Where Have All The Charters Gone" and "Breaking News - Zombie Update" see the link to Leggett's opines to the right of this page.