This is an important public policy question that needs to be addressed.
This last week there have been numerous news reports about Western FCU suing Jim Press, the deputy chief executive of the Chrysler Group.
The lawsuit claims that Press owes $609,286 on a line of credit and that he missed two payments on the loan.
While at Toyota, Press took out an unsecured line of credit for over $800,000 from Toyota Federal Credit Union. Toyota FCU was subsequently acquired by Western FCU, which canceled Press' credit line and asked for repayment.
I’m not saying that Toyota FCU should not have served Jim Press. His 37 years of employment with Toyota qualified him for membership.
However, from a public policy perspective should a wealthy individual, such as Jim Press, receive taxpayer subsidized financial services or should the taxpayer subsidy be more targeted?
Can I get this straight? Serve a member-owner as he or she starts at a company. But when he or she advances to a management or senior management position after 20, 25 or 30 years, then tell that person "sorry we can't serve you any longer because you are successful and earning a high salary." Please give me a break. A member-owner is a member-owner and is deserving and required to get equal service. Something that a banker would not understand.
ReplyDeleteDear Anonymous:
ReplyDeleteIf you read what I wrote, you will see that I did not say that the credit union could not serve the member. I raised the issue about whether this was the desired policy result associated with the tax exemption, given the mandate that federal credit unions serve people of modest means. Your comment makes it clear that you believe that the tax subsidy should go to all regardless of their socio-economic status.
That is ridiculous to say that because a member became wealthy over time, that they should not be a credit union member. Moreover, banks only like to help the rich.
ReplyDelete