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Offline bytemaster

Research Help...
« on: October 17, 2014, 03:29:29 PM »

What are the legal restrictions on a Credit Union buying and holding a digital asset such as BTC or BTSX?

How much would it cost to buy a Credit Union that is already up and running?   Examples of recently sold Credit Unions or ones on the market today?

Is it simply a matter of becoming the largest depositor in a particular Credit Union as they are in theory owned by their members? 



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Offline CoinHoarder

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Re: Research Help...
« Reply #1 on: October 17, 2014, 03:48:55 PM »
This is a basic rundown of the costs to start your own credit union including operating costs. There are 2 different types it seems that offer different services so the cost varies.

http://www.ncua.gov/Resources/Documents/CUDev/AcrobatDocument6-26-09.pdf

Offline maqifrnswa

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Re: Research Help...
« Reply #2 on: October 17, 2014, 03:56:03 PM »
What are the legal restrictions on a Credit Union buying and holding a digital asset such as BTC or BTSX?

How much would it cost to buy a Credit Union that is already up and running?   Examples of recently sold Credit Unions or ones on the market today?

Is it simply a matter of becoming the largest depositor in a particular Credit Union as they are in theory owned by their members?

1) for legal restrictions, see NCUA Rules and Regulations Part 721- Incidental Powers, for additional services with respect to pre-approved activities permitted to carry out a credit union’s  business purpose. It's quite restrictive, but maybe can work.

2) You can start your own. http://www.ncua.gov/Resources/CUs/Dev/Pages/Start.aspx

3) I don't think you can "buy" a credit union, since the formation and entity is governed by ncua, which in turn requires credit unions to remain whole entities. The board exists to serve the members (depositors). Each member gets one vote, regardless of deposits - so you can't just "buy" it out.
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Offline CoinHoarder

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Re: Research Help...
« Reply #3 on: October 17, 2014, 04:03:21 PM »
What are the legal restrictions on a Credit Union buying and holding a digital asset such as BTC or BTSX?

How much would it cost to buy a Credit Union that is already up and running?   Examples of recently sold Credit Unions or ones on the market today?

Is it simply a matter of becoming the largest depositor in a particular Credit Union as they are in theory owned by their members?
3) I don't think you can "buy" a credit union, since the formation and entity is governed by ncua, which in turn requires credit unions to remain whole entities. The board exists to serve the members (depositors). Each member gets one vote, regardless of deposits - so you can't just "buy" it out.

Agreed I don't think you can buy one out, as each member only gets one vote. Also.. to join or form one there must be commonality between members.

Quote
To join a credit union, you must be eligible for membership. Members of each credit union share a "common bond," such as being employed by the same employer, belonging to an organization or church, or living in the same community. Some credit unions serve multiple groups with different common bonds. Each credit union determines the specific group or field of membership it will serve.

-----------------------

Each credit union serves what's called their “field of membership” - that's the commonality between the members. You may be eligible to join a credit union based on your:
Employer - many employers sponsor their own credit unions
Geographic Location - many credit unions serve anyone that lives, works or worships in a particular geographic area
Family - most credit unions allow members' families to join. So if someone in your family is already a member of a credit union - you may be eligible too!
Membership in a group - like a church, school or alumni, labor union, homeowners' association, etc.

It seems to start a Bitshares credit union we would have to form our own as there are restrictions as to the members must have "commonality." Buying a credit union for the purpose of Bitshares investment/lending would not conform to any existing credit union's "commonality."
« Last Edit: October 17, 2014, 04:05:21 PM by CoinHoarder »

Offline emailtooaj

Re: Research Help...
« Reply #4 on: October 17, 2014, 04:06:51 PM »
I happen to know a Sr. Vice President of a local credit union.
I'd be more than happy to reach out to him and ask any specific questions you may have.
Not sure what direction your trying to go with this but PM me some specifics and I'll see what info I can get for you!!
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Offline xeroc

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Re: Research Help...
« Reply #5 on: October 17, 2014, 04:09:30 PM »
I like where this is heading :) +5% ...

//edit: Post nr. 4000!
« Last Edit: October 17, 2014, 04:20:21 PM by xeroc »
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Offline CoinHoarder

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Re: Research Help...
« Reply #6 on: October 17, 2014, 04:26:14 PM »
What are the legal restrictions on a Credit Union buying and holding a digital asset such as BTC or BTSX?

It seems they are subject to know your customer and anti money laundering requirements (assuming members can use, deposit, or withdrawal the cryptocurrency), so this could be very expensive to setup. You would need to verify the identities of all users. I have heard to follow kyc and aml regulations as a money service business costs millions in the US. You must register nationally and also with every state separately. Very big legal costs to do it that way, it is much cheaper to partner or enlist services of an existing aml/kyc service. Those do exist.. Ones specifically targeting Bitcoin companies so it will be much cheaper to partner with a msb or find a service to take care of that.

Quote
In the U.S., credit unions are required to verify the identity of the people they do business with (so-called "know-your-customer" laws), especially if they are acting as money service businesses. They're also required to file suspicious activity reports (SARs) to the government.

Here is a couple examples of such a service that seems much cheaper than registering as a msb yourself: http://www.identitymindglobal.com/bitcoin
http://matrixvision.eu/products/evisafe/
http://www.strevus.com/compliance-solutions/countercheck-btc/
« Last Edit: October 17, 2014, 04:47:07 PM by CoinHoarder »

Offline sschechter

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Re: Research Help...
« Reply #7 on: October 17, 2014, 04:42:22 PM »
What are the legal restrictions on a Credit Union buying and holding a digital asset such as BTC or BTSX?

How much would it cost to buy a Credit Union that is already up and running?   Examples of recently sold Credit Unions or ones on the market today?

Is it simply a matter of becoming the largest depositor in a particular Credit Union as they are in theory owned by their members?

Are you setting up a Credit Union that accepts cryptos as collateral?

Or building a bridge to allow Credit Union customers to purchase and and hold bitAssets inside their CU accounts?
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Offline xeroc

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Re: Research Help...
« Reply #8 on: October 17, 2014, 04:43:42 PM »
Are you setting up a Credit Union that accepts cryptos as collateral?
Not sure what credit unions are supposed to do .. but my guess whould be that they are setting up a CU for bitUSD and on/off ramps .. and store them on the public ledger instead of a centralized banking server ..
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Offline CoinHoarder

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Re: Research Help...
« Reply #9 on: October 17, 2014, 04:49:15 PM »
What are the legal restrictions on a Credit Union buying and holding a digital asset such as BTC or BTSX?

How much would it cost to buy a Credit Union that is already up and running?   Examples of recently sold Credit Unions or ones on the market today?

Is it simply a matter of becoming the largest depositor in a particular Credit Union as they are in theory owned by their members?

Are you setting up a Credit Union that accepts cryptos as collateral?

Or building a bridge to allow Credit Union customers to purchase and and hold bitAssets inside their CU accounts?

Not sure specifically what he's trying to do.. I assume on and off ramps. CUs are pretty much the same thing as banks except they are technically "non profit".... although they pay dividends to members so I don't get why they call them "non profit". I think they can offer any service a bank can.

Offline Chuckone

Re: Research Help...
« Reply #10 on: October 17, 2014, 05:20:33 PM »
What are the legal restrictions on a Credit Union buying and holding a digital asset such as BTC or BTSX?

How much would it cost to buy a Credit Union that is already up and running?   Examples of recently sold Credit Unions or ones on the market today?

Is it simply a matter of becoming the largest depositor in a particular Credit Union as they are in theory owned by their members?

Are you setting up a Credit Union that accepts cryptos as collateral?

Or building a bridge to allow Credit Union customers to purchase and and hold bitAssets inside their CU accounts?

Not sure specifically what he's trying to do.. I assume on and off ramps. CUs are pretty much the same thing as banks except they are technically "non profit".... although they pay dividends to members so I don't get why they call them "non profit". I think they can offer any service a bank can.

Credit unions *act* as for profit organisms. One of the biggest I know makes hundreds of millions in profit each year and give back "dividends" (which is basically a refund proportional to the business you gave them, i.e the fees and interests you paid). The difference from a bank is that each branch of a credit union has a board that decides about small management decisions (pretty much like a franchise), and this board is elected by the members of that branch. Then you have the head office that decides about all the major decisions for all the branches. Instead of distributing profits to shareholders through dividends, they do it through refund to their members.

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Offline CoinHoarder

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Re: Research Help...
« Reply #11 on: October 17, 2014, 05:26:32 PM »
What are the legal restrictions on a Credit Union buying and holding a digital asset such as BTC or BTSX?

How much would it cost to buy a Credit Union that is already up and running?   Examples of recently sold Credit Unions or ones on the market today?

Is it simply a matter of becoming the largest depositor in a particular Credit Union as they are in theory owned by their members?

Are you setting up a Credit Union that accepts cryptos as collateral?

Or building a bridge to allow Credit Union customers to purchase and and hold bitAssets inside their CU accounts?

Not sure specifically what he's trying to do.. I assume on and off ramps. CUs are pretty much the same thing as banks except they are technically "non profit".... although they pay dividends to members so I don't get why they call them "non profit". I think they can offer any service a bank can.

Credit unions *act* as for profit organisms. One of the biggest I know makes hundreds of millions in profit each year and give back "dividends" (which is basically a refund proportional to the business you gave them, i.e the fees and interests you paid). The difference from a bank is that each branch of a credit union has a board that decides about small management decisions (pretty much like a franchise), and this board is elected by the members of that branch. Then you have the head office that decides about all the major decisions for all the branches. Instead of distributing profits to shareholders through dividends, they do it through refund to their members.

Yes, so technically they are "non profit". Like I said.. I don't understand how they can call themselves non profit, but they do.

Quote
How is a Credit Union Different than a Bank?

In the United States, credit unions are not-for-profit organizations that exist to serve their members rather than to maximize corporate profits. Like banks, credit unions accept deposits and make loans. But as member-owned institutions, credit unions focus on providing a safe place to save and borrow at reasonable rates. Unlike banks, credit unions return surplus income to their members in the form of dividends.

http://www.mycreditunion.gov/about-credit-unions/Pages/How-is-a-Credit-Union-Different-than-a-Bank.aspx



Offline bytemaster

Re: Research Help...
« Reply #12 on: October 17, 2014, 09:39:38 PM »
A credit union would give customers accounts and buy BitUSD with the USD they receive and promise interest rates half that of BitUSD.
A credit union would use yield to pay customers interest.
A credit union would refund any profits as either higher interest rates or lower fees.

Users of the credit union never see BitUSD... the credit union takes on 100% of the risk with BitUSD in exchange for USD deposits.  Most users wouldn't even know how the credit union was investing.

End result, convince a single credit union to invest depositor funds this way and bring in millions of dollars to BTSX.
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Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline Ander

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Re: Research Help...
« Reply #13 on: October 17, 2014, 09:41:16 PM »
End result, convince a single credit union to invest depositor funds this way and bring in millions of dollars to BTSX.
+5% +5%
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Offline luckybit

Re: Research Help...
« Reply #14 on: October 17, 2014, 10:28:43 PM »
What are the legal restrictions on a Credit Union buying and holding a digital asset such as BTC or BTSX?

How much would it cost to buy a Credit Union that is already up and running?   Examples of recently sold Credit Unions or ones on the market today?

Is it simply a matter of becoming the largest depositor in a particular Credit Union as they are in theory owned by their members?

Wow these are very interesting questions! Never even considered that.
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