Can credit union and coop banks replace traditional banks completely?
Edit (adding additional question): Has there been an attempt to do this on a national or societal level?
Can credit union and coop banks replace traditional banks completely?
Edit (adding additional question): Has there been an attempt to do this on a national or societal level?
Real scenario: you wouldn’t see that happen.
Hypothetically it could cause economic collapse because now there wouldn’t be money to back up all the loans that are outstanding. Followed by mass layoffs of people and all the other fun stuff that comes with it.
I’m not saying you’re wrong, just expressing my confusion: Don’t CUs also provide loans? Isn’t that their primary purpose?
CUs will issue anything that can help their maintain the required returns on the owners of shares (read: you). They can issue loans, but because they are not issuing on speculation but on a clear expectation of a return to the owners of the shares (read: you) they cannot loan as much. Your shares are the dollars in your account, the interest gained is the returns from loans.
These have to be guaranteed by someone, either the NCUA or another CU or bank. In fact, you can go to a Credit Union that doesn’t insure via the NCUA. I wouldn’t recommend it.