Consumers Want to Help Credit Unions, but...

Despite an improving economy and growing consumer confidence, there’s still turmoil in the financial world of millions of consumers. The American Consumer Council (ACC), a non-profit consumer education organization, calculates that nearly 32% of all consumer households remain “financially under-water” as a result of the 2008 Great Recession.

According to ACC’s president, Thomas Hinton, “Millions of consumers and American households are still paying the steep price for the irresponsible actions of those major banks and Wall Street investment firms that betrayed consumers and caused financial devastation during the Great Recession. Its repercussions will be felt for another decade.”

And so, it should come as no surprise that millions of consumers have been drawn to credit unions during the past six years. CUNA announced that credit unions surpassed 100 million memberships nationally, according to data collected from credit unions in CUNA’s June 2014 “Monthly Credit Union Estimates.”

In the past 12 months (June 2013 to June 2014), credit union memberships expanded by 2.9%, compared to 2.5% in 2013 and 2.1% in 2012, according to CUNA data. Credit unions added a total of 2.85 million additional memberships over the past year - the largest reported increase in more than a quarter century. And, in percentage terms, the 2.9% increase was the fastest since 2000, according to the CUNA analysis. However, according to CUNA, there was some negative news. Some 54% of credit unions experienced a decline in their membership numbers during the second quarter of 2014.

ACC’s Hinton, said, “This surge in credit union membership growth is just the tip of the iceberg, but it could be blunted if the NCUA fails to allow associations like ACC to continue to partner with credit unions.” Hinton noted that the NCUA has proposed new associational common bond policies that will hurt consumers by limiting their ability to join credit unions through legitimate associations like ACC.

Hinton said, “It makes no sense for the NCUA to create more regulatory barriers for consumers who desperately need and want the financial services offered by credit unions. There’s no question that credit unions have been a life-saver for millions of consumers since the Great Recession as banks are limiting their consumer lending and focusing resources on commercial businesses. Almost half of our new ACC members say they want to join credit unions, but the federal regulators are making it too difficult with their punitive policies and anti-consumer attitude. It’s very frustrating for consumers and credit unions. We don't understand why the NCUA is undermining the very industry it is sworn to protect and sustain.”

Hinton also addressed the need for credit unions to appeal to a new pool of potential members. “When you consider that only 14% of the Millennial Generation (ages 14-28) belong to a credit union, there are millions of young consumers that need to know about the benefits of credit unions. But, if the NCUA makes it too difficult for Millennials to join credit unions, they’ll just go online and deposit their money in a big bank. The end result is credit unions will lose the overwhelming majority of the Millennial Generation to banks, and the financial needs of young consumers will be hurt in the long term.”

The American Consumer Council currently partners with over 47 credit unions across the nation to provide financial services and educational programs to its 148,000 members. ACC has asked the NCUA to continue to allow federally-chartered credit unions to add established national organizations like ACC as associational SEGs.

Mark Wilson is a marketing and public relations manager for the American Consumer Council. He can be reached at: info@americanconsumercouncil.org

Why are No Bankers in Jail?

It’s been two years since the Great Recession ended according to the experts. This is despite the fact that millions of consumer are still suffering the financial pain and consequences of the Great Panic of 2008 that was brought on by a handful of greedy bankers and investment firms. Oddly, no one has gone to jail for their involvement in bringing on the Great Panic of 2008.

Apparently, the Department of Justice concluded that no crimes were committed; there was only bad judgment on the part of the bankers and investment firm executives who perpetrated the fraud on the American public.

How does the federal government expect consumers to have faith in our financial system when some 50 or more banking executives and investment firm managers knowingly rigged the system for their own selfish benefit, and caused devastating financial hardship for millions of honest Americans, who lost their jobs, savings, and homes as a result of “poor judgment” by these scoundrels?

While the federal government believes a debt has been paid in the form of nearly $80 billion in settlements from the banks and investment firms who were culpable in this fiasco, consumers don’t see it that way because the average consumer will not see a penny of that $80 Billion. That money will go into the federal treasury. Once again, the guilty go free and the American consumer gets pickled.  It's unbelievable considering it was the American consumer who bore the brunt of the losses in the form of home foreclosures, lost savings, forfeited retirement funds, and lost jobs and wages. And still, no one has gone to jail for their actions.

To complicate matters, once-respected auditors and tax accountancy firms were also culpable in cooking the books and providing misleading financial reports to shareholders and the government. But, they too, have walked away from this travesty with a mild slap on the wrist.

So, if you want to know why so many Americans are disenfranchised with the “system,” you need look no further than the halls of justice. They’re empty.

What Economic Recovery?

Despite a record-setting stock market and stronger job growth, most Americans don't think the economy has improved in the past year, according to a survey released Thursday by Rutgers University researchers.  Michael L. Diamond (mdiamond@app.com) offered the following assessment based on the Rutgers research report.

The grim assessment paints the picture of a stressed-out work force that is likely to spend money only cautiously, keeping a lid on economic growth, the authors said.

What do you think: Has the economy improved this year?
"I was surprised to see people are even more negative than they were 18 months ago," said Carl Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers.

The Report comes from a survey of 1,153 workers nationwide, taken between July 24 and Aug. 3 — a time frame that included a barrage of stories about global unrest. But it sheds light on a disconnect between statistics that indicate the economy is gaining momentum and Main Street workers who aren't benefiting. The Rutgers report is titled "Unhappy, Worried and Pessimistic: Americans in the Aftermath of the Great Recession." Among the findings:

• Two-thirds of Americans think the economy is the same or worse than it was a year ago, and 73%  don't expect it to improve in the next year.
• 33% think changes in their standard of living caused by the housing bubble's collapse and the recession that followed will be permanent.
• 78% has little or no confidence that the federal government can help.
• Only one in seven believe the average American is happy at work.
"They're really still suffering the consequences of what happened during the recession," Van Horn said.

Good and Bad Statistics:
The report helps explain a series of data that on its face is a paradox. The Standard & Poor's 500 this week has flirted with record levels. The nation has added 1.6 million jobs during first seven months of the year, the strongest job growth since 2005. And, its unemployment rate has declined from 8.2 percent in March 2013 to 6.2 percent last month.

But retail sales in July were flat from the previous month. And, personal income growth, particularly from wages, has been sluggish.

Consider the negative responses to this key question:
How do you describe Americans at work?

Happy: 14%
Well Paid: 18% 
Lazy: 23%
Productive: 43%
Highly Stressed: 68%
Not secure in their jobs: 70%
Source: John J. Heldrich Center for Workforce Development at Rutgers University

Overall, these response paint a very gloomy picture among consumers, who are responsible for generating almost 70% of the economic spending and growth for America’s economy. 

Is there a solution? 

According to the American Consumer Council, three things can be done to improve the economy and encourage more consumer spending: First, there’s a genuine need for more jobs. ACC supports a job stimulus program that provides tax-break incentives for American companies in the form of a tax credit for every new job they create. Secondly, ACC wants to see less government regulation, especially for small businesses (under 100 employees) to encourage hiring. Finally, ACC supports an immediate increase in the nation’s minimum wage with gradual increases over the next three years to $10.50 per hour.

Given the dismal attitude of so many consumers, action is required now!

Consumers Call to Action: Don't Let Federal Regulators Limit Your Financial Options

The National Credit Union Administration (NCUA) is considering bowing to pressure from the bank lobby and limiting legitimate associations like the American Consumer Council (ACC) from partnering with federally-chartered credit unions.  If this happens, it will hurt you as a consumer. Your ability to join a credit union will be severely limited.

At a time when the NCUA should be promoting credit unions to help consumer and rebuild America’s middle-class, the NCUA is unfairly attempting to restrict association members from joining credit unions. 

We need your help to stop this regulatory meddling and send a message to Washington that consumers have rights, and consumers should be able to join a credit union through their associations or non-profit organizations, if they so choose. Did you know that over 68% of all ACC members belong to a credit union? Let’s not lose that option!

The American Consumer Council is requesting that you email Gail Laster, Director of the NCUA’s Office of Consumer Protection (OCP), and ask her to "certify ACC as SEG Compliant" so that ACC members can continue to join credit unions and enjoy the many benefits credit unions offer consumers. ACC will continue to provide consumers with financial education programs and other important services. But, we need our credit union partners to do this. Credit unions have been a key partner with ACC in delivering important financial education, programs and services to our members.  

Please act today!

Below is the email address and Twitter address for Gail Laster at NCUA-OCP: Email: ocpmail@ncua.gov   -or-  Twitter: @The NCUA  --  Phone: 703-518-6640  or  FAX: 703-518-6439

Thank you for your help on this important matter and for standing up for your right to choose your financial institution as a member of the American Consumer Council.

P.S.  Please send a copy of your email to ACC at: Info@americanconsumercouncil.org

Corporate Social Responsibility and the Minimum Wage

Perhaps, the “Father of Corporate Social Responsibility” was Henry Ford. One hundred years ago, in 1914, Henry Ford stunned the industrial world by more than doubling wages to $5 a day. As a result of this progressive move, Henry Ford helped build America’s middle class and create today’s consumer-driven economy. He also put his Ford brand on the path to great success by endearing his company to every American family.

 

It’s now time for this generation of business leaders to follow in Henry Ford’s visionary footsteps and practice CSR by raising the minimum wage to a “living wage.”  And, what should that wage be? According to MIT’s Living Wage Calculator, it varies from city to city across our nation. But, regardless of the wage amount, the goal must be to lift people above the poverty line and expand America’s middle class so that we can experience a sustained economic recovery and ensure prosperity for the next twenty years. To calculate your city or state’s living wage, visit: http://livingwage.mit.edu/

 

Here are three living wage examples. In San Diego, the MIT Living Wage Calculator calls for $11.38 per hour or $23,671 per year. In Atlanta, it’s $10.10 per hour or $21,007. In New York City’s Queen Borough, it’s $12.75 or $26,521 per year. None of these wages are outside the boundaries of fair and reasonable compensation.

Can any prudent business leader or entrepreneur seriously argue that raising the minimum wage to a “living wage” will “break the bank?” If so, I would question that leader’s logic and standard of fairness. I would also ask them to live on $7.50 - $8.25 an hour for the next 30 days to see how it feels to struggle in the trenches of corporate America to make ends meet. I’m sure their opinions of what is “fair and reasonable” would change quickly.

If we truly believe that our nation stands for Life, Liberty and the Pursuit of Happiness, doesn’t part of that sacred covenant also ensure that minimum wage earners deserve a fighting chance to experience the American Dream? If not, then greed and arrogance will rule us.

Let’s set aside the politics and arguments of greed to come together and strengthen America’s middle class. Let’s follow Henry Ford’s lead and do the right thing. Actually, according to the American Consumer Council, raising the minimum wage makes good business sense. By boosting the minimum wage, companies will help expand the middle class and empower more consumers. This will create more spending and help to create higher corporate profits. That’s good for businesses, shareholders and investors. 

As the power shifts from the corporation to the consumer, it’s time for business leaders to stand up for consumers by ensuring a living wage for all workers. It’s time to rebuild America’s middle class.

About the Author:  Thomas Hinton is president of the American Consumer Council, a non-profit consumer education organization with over 145,000 members. He can be reached at: tom@americanconsumercouncil.org 

Why Do Leaders Lie?

This is a serious problem that has not only resulted in the unnecessary and tragic deaths of 13 people, but it calls into question the integrity of GM’s leadership. Why did they withhold this information from consumers and dealers? If the leadership at GM did not tell us the truth, they lied. It’s that simple. There’s no shades of gray when it comes to life and death issues. Sure, they can settle lawsuits and buy the silence of grieving families. But, the fact is leaders lied. It’s that simple.

When human lives are at stake and the leadership of a company knows they have a faulty problem with their product, leaders have a sacred responsibility to come forward and warn consumers. When leaders do not come forward and issue a warning to unsuspecting consumers, it is a criminal act and they should be charged, convicted and punished harshly to send a message that society will not tolerate liars whose silence or misleading statements cause deaths.

It has become all too convenient for leaders to lie. Recently, consumers were sickened by contaminated Foster Farms chicken. Their leaders did not come forward and accept responsibility until they were pressured by consumer organizations and retailers. Why? What were Foster Farms leaders afraid of?

Toyota’s leadership denied any responsibility related to its faulty accelerator problems in 2009.  Its chairman was shamed before the United States Congress and Toyota suffered major losses because of its credibility gap and deceptive practices. Ironically, despite jury convictions holding Toyota responsible for the sticky accelerator problems, the U.S. Department of Transportation issued a report stating most of the crashes were the fault of drivers who stepped on the accelerator instead of the brake. What rubbish! Tell that to the widow of the California Highway Patrol officer and his passengers who died in a fiery crash caused by the faulty Lexus accelerator. Is anyone with a brain suggesting a CHP officer doesn’t know how to tell the difference between the accelerator and the brake?  So, this is the nonsense companies and government agencies are feeding us; and, they expect us to believe them!  No wonder consumers have lost faith and trust in government and corporations.

It seems the system is full of liars who will do anything and say anything to cover their rear. But why? What’s wrong with coming clean and telling people the truth? No one is suggesting that a company needs to admit guilt. That’s why we have courts. But, certainly, when the data suggests you have a problem with a product, you need to alert your consumers. It’s the only way you will maintain their trust and earn their respect. But, corporate leaders have been taught by their shareholders and lawyers to be silent, say nothing, don’t admit to anything that could negatively impact our quarterly earnings. This is the low level to which corporate leadership has sunk. Had it been the daughter of GM’s president who was killed because her ignition switch clicked off, I wonder how fast GM’s engineers would have identified and solved the problem?

Now, GM has serious credibility problems with consumers. Let me put it in terms the bean-counters and leaders at GM can relate to. The bottom line question that GM should be worried about it this: “What parent would ever buy their teenager a GM product knowing its leadership withheld data that contributed to the death of 13 people?” The answer is no one!