Since reading the initial post five years ago I have been convinced that the idea of a Daily Kos credit union is a good one. Off and on I’ve done some thinking about it and a little bit of research but as such a large undertaking never got very far. Recently though I’ve been back at it and I’m convinced that this is not beyond the abilities of the Kos community, or a group of progressive people in general (obviously it doesn’t need to be called “Daily Kos” because of the trademark usage and branding issues, but that’s the starting point).
The Move Your Money campaign is a great start but as Thomas Friedman keeps harping, the country needs more than just “good” solutions, we need and deserve, something great. I already use a local bank but it’s a bank for the purpose of serving stockholders. They throw events for the board of directors and corporators. They charge a lot for ATM and they charge overdraft fees instead of letting you take money from a savings account if you run out in checking. Simple things that are common sense outside of the banking world. I understand that some of this is just part of business but a bank could be created to truly do something unique and good for its members. For the customer, these “local” banks aren’t always out there for the little guy either.
At the TechCrunch Distrupt conference in May, one of the startups to launch was Betterment, an online bank of sorts. They provide you a “savings account” (not FDIC insured) that is a hybrid of bonds and stocks at a ratio each account holder sets using a slider. Their theory is that interest rates are so low why not add a tiny bit of risk for a decent interest rate. After all, the banks we use are charging at least 6.5% interest on the money they lend. Combined with a simple and slick interface they have a good idea.
The idea I dovetail with the credit union is investment in progressive businesses. Traditional banks don’t see investment in young companies as a good move. A bank/credit union/ angel investment incubator that is created with these ideals in mind would have a much better understanding about where these people are coming from. The tea party is gaining support by claiming to have a populist philosophy. While the tea people are all insane, their message is what people want to hear. Citizens Bank understands this vibe with their new ad campaign – we all put money in and we all get money back. The rising tide to lift all boats.
Y Combinator is a startup incubator, which helps tech companies ramp up with funding and experienced mentors. On the other end, Kickstarter is a micro funding platform where people can seek small amounts from “investors” in return for completing a project (a book, movie, craft) and giving each early investor a thank you of sorts, ranging from their name in the credits to a copy of the completed project to a lunch with the author/entrepreneur involved. As much as politicians and pundits (looking at Friedman) like to pretend, new businesses aren’t just formed out of thin air or because there is a good idea.
BankRate as referenced in the 2005 post boils down forming a credit union into 10 bite sized steps which come down to forming a corporation and having enough members to get off the ground. The National Credit Union Administration recommends at least 3,000 members in order to be viable. It feels like this is the right time to start taking some power back from these banks.