Take down by the FDIC

TDECU‘s Safe & Sound page has been killed by the FDIC.  Here is a link to the cached page and the site now redirects to their normal site.  I can see how this may be a sensitive topic to some, but regardless, it is good to discuss it and any implications it may bring for future CU’s.  No where does TDECU talk about a specific bank, just the industry in general.  I don’t see how this is any different than any of the talking heads on CNBC blabbering on about the market and if your money is safe.  CU Times caught wind of it as well although their article doesn’t seem to back up TDECU as much as I thought it should.  Is this just bankers pushing credit unions around or is the safe and sound site a little too “alarmist”?

Welcome to communism

We are seeing our free market capitalism disappear before our eyes.  

SEC bans short-selling

Fed takes control of AIG

Treasury set to bail out Fannie Mae, Freddie Mac

The founding ideals of our country are so closely tied to the basic premise of credit unions (member-owned, democratically controlled) that I now can see how credit unions will be different in the future: they won’t exist.  Whether the threat comes from the Treasury Department’s Blueprint for a Modernized Financial Regulatory Structure, which omits the NCUA from the President’s Working Group on Financial Markets and merges the NCUA with the new FDGA (Federal Deposit Guarantee Administration), or some new “measure” that the government takes to shore up the markets, credit unions will face a major threat if the government continues to bail out large financial institutions.  

Imagine telling our members where they could spend their money at.  Oh, I’m sorry, we have a corporate agreement with Chevron and you can’t buy gas at Shell or BP.  Mister Member, we’ve noticed you’ve spent too much money in Vegas and Atlantic City in the past few months so we’re going to put your assets in control of the credit union to insure proper usage.  Crazy you say, right?  AIG messed up and rather than letting the people who took the risk get hammered, the government is bailing them out.  Banning short selling is even more shocking to me than that.  

This is a silly argument, but what would happen if a CU told their members where they could spend their money?  The members would leave.  Or using the US-credit union analogy again, we’d use our democratically elected officials to change the rules.  

I’ll leave you with a quote from the 10 Planks of the Communist Manifesto:

Centralisation of credit in the banks of the state, by means of a national

bank with State capital and an exclusive monopoly.

More on OpenID

I was just reading an article in Information Week talking more about OpenID and how it has been starting to catch on and is being implemented on mainstream sites, like MySpace.  As quickly as they praise it, it rapidly turns around into how many sites enable the use of their OpenID, but they don’t accept ID’s issued by other providers because of “inherent risks”.  This sentence got my brain thinking:

“Since no OpenID provider makes public its practices around vetting and protecting identities, there’s effectively no way of assessing liability for faulty initial identification.”

Who is bound by law to verify ID’s stringently?  Oh, that’s right.  Financial institutions.  So why don’t banks and credit unions jump on board and offer OpenID?  (I’d love to see a start-up virtual credit union do this.)

One potential issue I see with this is there will still need to be a verificaiton step involved to verify that the OpenID was really issued by a bank or CU.  I could go get robbiewrightbank.com, issue “verified” OpenID’s that could be used to log into sites requiring stricter control over the content they are offering on their site.  So the question becomes how can you create a secure OpenID that is provided by numerous companies?  I think the answer may lay in an uber-secure TLD for banks and credit unions. Literally, have .bank or .creditunion or the like.  The registrar for the TLD would verify that the FI buying the domain is legit, using government verified documents like call reports.  This concept has been kicked around before but many it just doesn’t have any legs.

So what do you think?  Is there a need for a secure TLD for only financial institutions?  Do banks or CU’s really need to offer an OpenID service?

When Google/Microsoft/BofA/Wamu enters your market

Bank of America is still building out branches and their ATM structure like crazy.  Wamu is every where.  We even have super tough competition coming in from CU’s that historically have been in other cities and are 5 times our size.  What is a credit union to do?

Google just stepped into the browser marketplace with Chrome.  Building on other open source projects, they’ve thrown their development staff and large stash of capital behind launching a new browser project.  It is different then most other browsers, is smokin’ fast, and combines many common tasks into a simple process, like search.  Go figure.

The competition in the credit union space is only going to get worse.  In my CUSO side of life, there is really only one main competitor and they own the entire marketplace.  They are the Microsoft of my market.  So what are small CU’s, or small CUSO’s, going to do to stay alive?  Can we really survive based solely in niche markets?