I think that Newt Gingrich may be right about credit unions being government-sponsored enterprises. Consultant Dennis Dollar and others have criticized the presidential candidate and former speaker of the House for describing credit unions as GSEs.
Dollar wrote in an opinion essay for the CUTimes.com, “Sorry, Mr. Speaker, credit unions are not GSEs. Period. GSEs are government-sponsored enterprises Freddie Mac is a quasi-governmental entity with a direct government sponsorship. Fannie Mae is the same. Credit unions are not, nor have they ever been, a quasi-governmental entity.” (See CUTimes.com/DollarGingrich).
The word “quasi” is an adjective meaning to “resemble” something. As a long-time CEO of a credit union, it is my belief that credit unions are quickly becoming quasi-governmental agencies. Almost every breath we take at the credit union is controlled by some government regulation. And in too many instances, we are becoming simply an extension of the government bureaucracy. Today we collect taxes for the Internal Revenue Service. In California, as of Jan. 1, we now will collect delinquent franchise taxes for the financially insolvent State of California. We already collect delinquent child support payments.
We spy on our members via Suspicious Activity Reports. We report information about our members that would cause them considerable grief if they understood the intrusive and long reach of government.
Even if a credit union doesn’t fit the technical definition of a GSE, the government imposes so many rules and requirements on every business, even more so on financial institutions, that just about everyone could make a case that they are a quasi-branch office of the federal government. Gingrich’s perceived slight about the organizational structure of credit unions may not be far off the mark.
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