Credit Unions ARE NOT GSEs!

 

 

Dear Douglas,

 

Newt Gingrich made an egregious factual error in the December 15 Fox News debate that needs to be corrected, CEI's John Berlau explains in analysis on Openmarket.org.  In response to a question from Chris Wallace about Gingrich's $1.6 million in consulting fees from Freddie Mac, Gingrich asserted that credit unions are akin to "government-sponsored enterprises" such as the disgraced Fannie Mae and Freddie Mac.  Berlau disputes this:

 

But these entities Gingrich cited do not bear any resemblance to the "GSE model." In fact, credit unions are some of the least subsidized financial institutions. Credit unions ... are member-owned cooperatives that receive no government support, save for the deposit insurance that banks also receive. They are owned owned by member depositors who receive excess funds in the form of dividends. Members can also take out loans from the credit union for items such as cars and homes.

[Fannie and Freddie] had special federal charters and special lines of credit with the U.S. Treasury. They had implicit government backing that became explicit when the entities imploded in 2008. ►Read the full analysis on Openmarket.org: Memo to Gingrich: Credit Unions are Not GSEs
 

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