 Ladies and gentlemen, I do believe, at the house at Buchhorner with Jim Hogue. And your guest today is Matthew Krupp. And he is an expert on credit unions. And we are going to be finding out today what a credit union is, what credit unions do, and maybe what they can do and don't. And that will take up a while. And then I will be grilling him because he's told me he has his crystal ball here. And we're going to be looking into the future of credit unions, having to do with perhaps crypto currencies, digital currencies, other alternative currencies. And so I'm looking forward to that because my crystal ball tells me that it's going to be a very difficult hall to try to get an alternative currency as a major currency in the state of Vermont. And I would love to find out from Matt what he thinks is possible in that realm. But let's start out with the simple stuff. What is a credit union? And what does it do? And Matt, please tell us a little bit about yourself, your studies, your drift into monetary reform because we met many, many years ago having to do with a state bank, I believe. So you'll tell us where your studies have led you. So take it away, Matt Krupp. Well, thanks for having me here, Jim. And yeah, this is a topic that is near and dear to my heart. So maybe to start, just what the credit union is, is at its core a consumer cooperative financial institution. So something that when I first learned about them, it was almost by accident back during the 2008 financial crisis. I was reading some article and it mentioned credit unions. And the idea of a bank that's owned by its customers was like mind-blowing to me. And so I went down a little bit of a rabbit hole learning about them because it was kind of funny. I found out after the fact that back in the 60s, my grandfather had been the treasurer for like a small teacher's credit union in Kansas. But just it had never clicked to me that that was anything really to be aware of, or it was just sort of a little side job that he had had, not something that was connected to anything larger. But so they had really been flying under the radar and things have, there's been some interesting kind of structural changes of the years. But at its core, the idea of a credit union is a financial institution owned by its members. And one of the other kind of key things that really drove them are gone and we'll talk about the sort of how they've changed over time is that they initially were connected to specific communities that were referred to as the credit union's common bond. And then the time before you had things like credit scores or another kind of quasi-objective tricks for allocating credit loans, the fact that you were going to the credit union for your loan meant that your loan was coming from the savings of say, fellow members of your church or people who worked in the same workplaces you or something like that, which created the sort of social capital and a level of kind of given taken trust that would not exist in a larger financial institution, which on the one hand meant that you'd elect a board or a credit committee from among that community who would have the sort of social knowledge to be like, okay, yeah, if we give you a loan to buy a car to buy some Christmas presents for the holidays or something like that, we believe that you'll pay it back. We know you've got a job, we know you've got a good character, all of that. And then on the flip side, even if someone was kind of going through wrong times, they'd be less likely to simply default because it wasn't just a commodity relationship of this investor on bank, which is seeking to make money, made me a loan. Now I'm bankrupt, I'm gonna default. People sort of recognize this came from their neighbors or their fellow parishioners' savings. And even if they couldn't pay it now, there was some sense of moral obligation to do so. So that kind of two-way street of the community again, saying, oh, this person had a terrible accident, okay, we're gonna write off the loan because we know that it would be socially harmful to kind of collect on it. But at the same time, that person maybe five or 10 years later, there's plenty of examples of them being like, yeah, I was ready to check for $5 every month, even when they didn't have to because they felt that sense of it as a community institution. So early credit unions really grew up around these sorts of small common bonds. There were little organizations, a few hundred people maybe. There were some that were bigger, certainly kind of the municipal credit union in New York City had early on tens of thousands of members, but the average credit union was small and credit unions kind of grew extensively, right? So through the creation of more credit unions rather than consolidation or making credit unions bigger. So that sort of shifted around the end of the 1960s when in the 1930s, the FDIC was created, federal deposit insurance that said that if a bank failed, the federal government or a deposit, a federal leave kind of managed deposit insurance pool that all the banks paid into would cover the losses. So in the credit union system, they were initially mostly small consumer loans. And so, and there's a lot of regulatory stuff that kind of compartmentalized up until the late 70s, what sorts of lending different kinds of financial institutions could do. It was around 1980 that a lot of those were lifted as part of the sort of banking reforms and general sort of shift to the neoliberal era that happened around kind of Carter Reagan. But so it was really the compartmentalization was banks were the ones that did, commercial lending, might produce mortgages, things like that, savings in loans were a whole separate category that was really about sort of home lending, mortgages, that sort of thing. And then credit unions were the sort of smaller institutions that were providing the sort of credit that folks now might kind of have a credit card for. The smaller consumer credit may be buying a car or that sort of thing. But so around in the 1960s, there was a big debate in the credit union world around whether credit union should also have federal deposit insurance. And the sort of two sides of the argument were on the one hand, banks had it, they were consolidated, it was really, if people were thinking, where do I keep my savings? Do I keep it in the place that if the institution fails, the federal government guarantees that I get my money back, or do I keep it in the small semi-professional or even non-professional community institution that doesn't have that guarantee, you know, there's definitely kind of like a shift of capital towards those insured institutions. But on the other hand, there is kind of the argument that with that insurance comes a lot of regulatory burden and it would sort of shift the character of credit unions away from kind of community control and being accountable to those founding common bond communities to the regulatory structure. And so it kind of went back and forth around 1970, the national, the regulator for credit unions had moved through between a few different federal agencies, but the NCUA, the National Credit Union Administration was created as the sort of permanent home for the regulatory body and the National Credit Union Share Insurance Fund, which is parallel to the FDIC and has many similar characteristics, but it's its own separate pool of money from the banks insurance fund was created. And that's the time you see the inflection point where the number of credit union members continue to grow, the amount of assets continue to grow, but that the peak of number of credit unions and from then there's been this kind of this consolidation trend that's happened. And so really from 1970 to the present, you see sort of mergers, the professionalization and really in having again those regulators who demand a certain level of professionalization and from a regulatory perspective, it's easier to regulate a few large institutions that are highly professionalized than many small institutions that are being run by people like my grandfather who have another full-time job and they're kind of doing this as almost community service where they might get a small token paycheck, but it's definitely a side job, not a main career focus. And so that's really kind of driven the, that along with some of the larger sort of financial sector dynamics is what's kind of driven the development of what the current credit union system looks like now, which is, you have a few credit unions that are quite large, a 10 billion in plus in assets. And then you have this kind of, a lot of still more local ones, but oftentimes credit unions that are made up of five, 10, 15 organizations, common bond unions that have just merged in the past 40 years, which has definitely sort of meant that there's been more, the kind of center of gravity and identity in that sense of kind of social accountability that defined early credit unions, much more rare now because again, they're using credit scores, they're using very similar sort of approaches to banks, they still have the cooperative structure, so there aren't profits going to shareholders, the profits are being returned to members through better rates on savings and on loans, but the kind of cultural and process aspect has kind of converged as, especially post-1980, all of the different types of financial institutions were allowed to kind of encroach on each other's turf. So that's kind of the thumbnail sketch of the development of the credit union movement today. Well, thank you. And I have come up with a lot of questions for you in the meantime. The first one is, what's the difference between a federal credit union and a credit union that is not a credit union, call it a state credit union or whatever? Yep, so basically it's who charters the institution. So either a credit union can be chartered by the federal government, which makes it a federal credit union, or it can be chartered by a state. And so early on, like say in the 1920s, when the credit union movement was really getting going, but a lot of the, there's a lot of activity and there's a concerted push to get laws, enabling laws for credit unions. And so a lot of states pass those enabling laws and then in the course of maybe a decade. And so a lot of credit unions were started under those state charters. And then in 1934, the federal credit union act was passed, kind of in the midst of a lot of different new deal, great depression stuff that then meant that you could incorporate a credit union anywhere in the United States. It didn't have to be in the thing at that point. It was maybe two thirds of states had credit union enabling acts at that point. So that's the sort of background of the two charter system. Both types of credit unions can become members of the insurance fund, federal credit unions have to. State credit unions, it's dependent on each state's laws. Most states require that they do. I believe it's like Ohio and maybe one or other, two other states do allow state charter credit unions to choose to not be federally insured, which gives them a bit more autonomy. So in those states, there's actually, I think there's like one or two left, there used to be a lot of them, but there's like one or two left kind of private insurance funds that some of them will join instead. So if they fail, it's covered out of that private insurance, but it's not backed by the federal government. And there definitely is some kind of little nuances and things about the whole sort of laboratories of democracy, of states thing, of different credit union, state credit union enabling acts, having different things that credit unions are allowed to do. So like one of the big points of contention, for instance, among banks and credit unions, it's sort of related to that 1980 era financial deregulation where credit unions started to be allowed to encroach in on banks turf and say mortgage lending and business lending in particular. And vice versa, banks were allowed to sort of encroach more into that small lending as credit cards became more common, et cetera. But so one of the things that there's often a sort of struggle over is on the one hand, because they're cooperatives that operate on an off-for-profit basis, credit unions don't have to pay sort of federal corporate income tax, which pisses off the banks. But credit unions are also limited to lending no more than 12.25% of their assets to businesses. So the vast majority of their lending has to be to individual consumers, which the credit unions, obviously that limits what they're able to do and limits competition to the banks. So oftentimes like those are kind of the back and forth of, oh, credit union should be taxed more or credit union should be given more the ability to sort of compete more completely with banks. But so one interesting little example, and Vermont is one of a handful of states that has a sort of line in their credit union, state credit union and lending acts that allows for state credit credit unions equity investments in other cooperatives. So that doesn't count towards business lending that counts towards, if it's a consumer co-op like a food co-op or a worker cooperative that's being converted from a conventional business or any other forms of cooperatives they're allowed to sort of deploy some of their capital as kind of equity investments in a way that doesn't count towards their business lending cap. And so that's one of those things where there's other little things like that that mean there's some diversity in what state charter credit unions are sort of allowed to do beyond the sort of vanilla federal credit union charter model that's fairly standardized no matter where you are. Well, that opens up more questions. Now, when you use the word equity investment is that's not a straight substitute for the word loan, does it? No. So what is it if the Vermont's credit union, the one I'm in, which is a state credit union, right? But also federal or? Which credit union are you in? VC, the employee state credit union. Yep, via CCU. That's a state credit union. Yep, that's a state credit union. So it's common bond is currently the whole state of Vermont. Yeah. So if they make an equity investment in a food co-op, what does that mean? So they're actually one of the few credit unions in the country that has a co-op equity investment program. It's called co-op capital. There's a page on their website if anyone out there is interested in checking out the details. But basically if you're to a cooperative generally to back up a moment is an organization that exists to operate on a not-for-profit basis towards its members, right? So it's not a non-profit in the way that something like the public access station that you're broadcasting from is a non-profit or a public, it operates in business, it generates revenue and it aims to generate a surplus. But the goal is that it then returns the surplus to its members prorated by their use of the co-op. So in a consumer co-op, right? If I buy $1,000 of groceries and you buy $2,000 worth of groceries, and at the end of the year there's a profit, the patronage refund, the return of that profit, you would get twice as much as I would get. And so because of that, right? You're getting a return on use, not a return on capital. Sort of when you think of traditional equity investments, I buy a 10% of a company and I get 10% of the profit. That doesn't work for co-ops. So the two ways that investment in co-ops can happen is one is debt, I make for instance my food co-ops in Burlington City Market recently expanded and they wanted to fund part of it through kind of direct member investments. So they said, we're gonna issue bonds essentially. And co-op members can buy the bonds, they'll pay a little bit of interest and after seven years or 10 years, the principal will be paid back and you'll go on. So that's one way. The other way is through what's called non-voting preferred shares. And so one of the core co-op principles is one member one vote. And so we can't have something where someone comes in and invest additional capital has additional governance power. It's a democracy, democracy it's at the core of the co-op model. And so these non-voting preferred shares behaves in some ways like debt, but are more patient. So essentially you say buy a share for $100. The first slice of profits before you return profits to the members kind of as patronage, maybe with a target return of call it 5% or 6% goes to those preferred shareholders. And then the rest of the profit goes to the members. And so that sort of, so it could be something where the credit union could be joining as a member of the co-op and that would be equity, but it could also be buying those non-voting preferred shares as kind of a patient social investment in cooperatives. Okay, well, thank you. I tried to follow that and I think I did. Just to double to be a little bit redundant here when I walk into the credit union posted on the wall are there assets and liabilities, assets being loans, liabilities being deposits. If the credit union, if your credit union for example makes an equity investment in a local co-op where does that go on the balance sheet? How does that work? And where does it come from reserves? Well, of course, I'm sorry to interrupt, banking and credit co-op, credit union lending doesn't come from deposits. It comes from, if you will, in there. It's based on deposits and reserves, but it's created money with a savings and loan. That's not the case. The savings and loan lends out the actual money. And maybe that's one reason why savings and loans don't work anymore. Also there was, you know, this game. There's a lot of fraud in the US. So anyway, if you're looking at a bank balance sheet this is getting really wonky people, so I'm sorry about that. If you look at a bank balance sheet, the equity position that the credit union takes in the co-op would be on their asset side. Yep. Okay, I got it. And the other thing to think about, because again, sort of when you think about what is the equity of the credit union? You know, unlike a bank which can sell those kind of common, you know, those common investor shares on the stock market or what have you to sort of build the equity that sort of allows them to, you know, with the way bank regulation works, you need a certain amount of equity in order to, you know, a ratio between your amount of equity and the sort of amount of deposits you have, because the equity is what, you know, is what would be lost if the book was failed. And then first, and then, you know, the insurance fund would bail out the rest, right? With the credit union, right? The equity is the member share, which is often a token amount. So, you know, five or $25, generally very minimal. And then the other thing is retained earnings. So, because they're co-ops, it's a little bit harder for them to access equity capital versus, you know, a traditional for-profit firm. So, for many credit unions, the sort of building of that sort of equity or capital base is something that happens over time through retained earnings. Okay. But yeah, for those sorts of investments, yes, it would sit as an asset on the balance sheet. So, it's defined the, there's no difference between a credit union and say your local bank in terms of the balance sheet, because their reserves and their assets are loans plus the lawnmowers and the building and other stuff that is, and actual money that is theirs. Right. Okay, got it. Now, where are we? I wrote some questions down and I think I just covered them. Okay, oh yeah, just to make another redundant question, a credit union works in the fractional reserve system like your local bank. Okay. Right, yeah. So, it's the sort of thing where, you know, when you, it doesn't need to have one to one cash on hand for deposits, right? You can, yeah, you take in deposits, you need the regulatory system basically sets a certain level of the, you know, how much capital you need to have versus how much you can lend out, right? So, the more capital you have, you can bring in more deposits, you can lend out more money. Yeah. And I think one of the big problems they had in Cyprus was that they offered too high a return on the savings and they didn't have any loans. So, they couldn't possibly pay the dividends on the savings and so they went belly up and then now in Europe, they know they can't do that in advance so they're actually charging people, a demarrage, they're charging people a fee to take their money. So, we're wondering about, you know, how that might play out in the United States but we don't have to go into that unless you want to. I mean, you know, that gets into some of the bigger questions about, you know, where you sit in the international currency system, right? Because I think this is one of those things where, you know, as long as dollar hegemony is maintained, right, you know, and there's kind of extra resources flowing into the American economy and the American sort of economic system because, you know, we're sort of at the center of it and we're able to collect rents off of that. You know, things are relatively stable compared to if you're in a peripheral country in the economic system where you're being extracted from and the sort of, the amount of give there is before you find yourself in crisis is much, much lower than it is here. There's definitely different dynamics there. And depending on where you go online, it either looks like the sky is falling because of the derivative situation or it looks like no problem because QE, you know, one, two, three, four, five, et cetera can always add to the money supply as we need it. And I gave a talk many years ago about why the U.S. gets to do that and the main thing that I said that I very, very rarely hear anybody talk about and that I think they should is gun both diplomacy. You either maintain, we either get to maintain dollar hegemony or we'll kill you. We'll destroy your country. If you don't keep the oil, you know, the oil for dollar system going, we will destroy your country, which has been done, of course, several times already over the last several years. It's a more, it's a generally more subtle form of empire but it's still a form of empire, right? Where you have a periphery that's being extracted from and the sort of center where sort of resources that's being overdeveloped by the sort of amount of resources or I mean, ethically you could even consider a plunder that's being sort of accumulated in that center. And so if you look at past empires, whether that's Rome or whether that's Britain or other places, I think Britain's an interesting one to sort of look at as kind of a slow receding back from sort of being an imperial center where there's still a fair amount of kind of, the capital that was accumulated in the city of London and the society generally, something that once it's there, there's certain ways of kind of locking it in. But at the same time, sort of over time, if the sort of central flows are going elsewhere, the general influence has been in the client and even without the sort of self-inflicted wound of Brexit, like that's, it's this, as a society, kind of how do you come to terms with the fact that you're no longer sort of the central repository of plunder for a large portion of the world? Well, that's, if you're interested in that topic, we can do another program and another time on it because it's worth several hours of discussion on its own, I'm writing a paper now called All Wars or Bankers Wars and I've gone through the, I started with the Mayflower and the loans having to do with that and right up through the currency act and then into the war of 1812, the war between the states and I'm gonna be touching on the Boer War, the war against the Filipinos, the Russo-Japanese War and then World War I and it's a mess. But if you follow the thread, which is very difficult, I'm not saying that it's easy for me to just open up a book and follow the thread. I'm using several different sources and that thread always goes back to the banks and it's a kind of an interesting topic. So anyway, there's a, let's switch a little bit now to the ability or the potential ability of a credit union to let's say host, I don't know what the right word is, a situation like a Liberty dollar. I just interviewed for one hour a Liberty dollar expert and they have warehouses around the country where they have goods. Liberty dollars are backed by silver and toward the end of the interview I asked him, so what happens if Uruguay wants to switch to Liberty dollars as their currency? And he said, well all they have to do is open an account and of course that's based, that's one hour of discussion on what a Liberty dollar is. So here you have an alternative currency that cannot be used to pay taxes or fees and it can be used in international transactions. Well it's kind of like Amy Kirschner's credit union. Actually, Amy Kirschner's mutual credit system, yeah. Only it's backed not by the mutual credit system that Amy Kirschner's running, basically functions out of the dollar Federal Reserve system but you don't have to spend those dollars because you're accumulating credit union. You're using the music unit of account in that case, right? For sort of barter, for valuing barter type transactions. So I'm glad I mentioned that because I'm gonna ask you about how what Amy Kirschner is doing could be helped by a credit union, how they could maybe get involved and become part of the exchange or if maybe Amy is handling it so well on her own that that would become irrelevant. And then how the Liberty dollar people might become they're on Liberty dollar, it's an anti-bank but they call themselves the anti-bank. There's no fractional reserve, there's no lending per se, there's mutual credit but they don't lend in the same way a bank lends or the same way their credit union lends. So anyway, I'll throw that out there with that mess that I just said and you can sort of sort it out. Yeah, so one of the things that got me interested in this topic of cooperative finance and credit unions to begin with was this question of what are the alternative economy possibilities that a democratic member accountable financial institution could engage with that a more traditional one would not. And so before I get into what I see as the possibilities I'll talk a little bit about what I see as the barriers to that because I've been kind of like thinking about that for a while. The first one obviously is the question of just being regulated what's gonna sort of set off regulatory alarm bells which forced them in the back down. So an example of that was I think it was the founders of Wikipedia years ago created like kind of early in the Bitcoin era, or basically said that they were gonna sort of have the, they created a virtual credit union. And then we're gonna have the credit union be sort of allow for a kind of custodial accounts of cryptocurrency. And this was probably like 2012, 2013, right? It was very, very early in the sort of Bitcoin era. And so they ultimately kind of ran a foul of kind of the regulators being like, what is this? What is this? We're not trying to treat this. This is high risk and could create liability. And if it is high risk and could create liability that puts the sort of insurance fund at risk. And that's really like their primary, the prime directive so to speak of the regulatory apparatus is make sure that the behavior of the members of the insurance fund aren't taking on, aren't doing things that are so risky that it puts the share insurance fund at risk. It puts the share insurance fund at risk. Like derivatives. Right, right. So there's that kind of, that barrier. Then there's kind of the more sort of ephemeral but kind of question of, okay, so how do you kind of take a institution that it is democratic, but you have a, you have an elected board and everything like that. But that has competing priorities and how do you sort of demonstrate to it that these things, that these are things that are kind of moderate risk to you and would bring sort of like meaningful benefit to their membership. And I think that in terms of credit unions that have been the most willing to be creative and give serious consideration to sort of innovative ideas in this way. You know, again, in terms of at least the Vermont scene, ICVSECU is kind of head and shoulders above everyone else. Right, so with the, for instance, that co-op capital fund I mentioned came into being after there was a worker co-op conversion that the new school of Montpelier, which is kind of a special ed school was wanting to, you know, the employees were seeking to buy it and turn it into, from the founder and turn it into a worker cooperative. They were interested in lending but had issues with the regulator around personal guarantees. And so that, those were then what motivated them to do the research and find this, this kind of this thing in the law that no one in the credit union world had even remembered existed and created a new program out of it. And so I think that sort of the key for these sorts of initiatives generally would be kind of finding the one, so something like what Amy Kirschner has done with the mutual credit system, other things like that, really finding those things that you could sort of demonstrate that this would advance the mission and would benefit a critical mass of members to sort of like nudge towards adoption. And then there's the other piece of saying like, okay, so, you know, in terms of what is, what is kind of a worthwhile use of activism time, right? Sort of saying, okay, if it's potential here, moving towards having that, you know, saying like, okay, well, run for the board of directors and be sort of part of that group that helps define the strategic direction of the organization. The other thing that I think, and this is kind of where my energy has moved as I've kind of spent many years thinking about this and thinking about cooperative finance and sort of how do we build financial structures that are generative of an economy that works for everybody is sort of thinking in terms of kind of ecosystem building, right? Where it's not relying on a single institution, whether it's, you know, a bank or credit union or anything like that, but recognizing that if you have, you know, several different types of institutions that can play different roles and take on different levels of risk or prove things to a certain extent to which a larger institution no longer views it as entirely risky and untested, that that can kind of allow you to sort of in a stepwise way bring sort of these alternative ideas closer into the mainstream to the point where they can feel adoptable. So an example of that was kind of that, you know, when I was first starting out, I was like, oh, well, credit unions are cooperatives. They should be investing in other cooperatives, da, da, da, da, da. And most of them were just like, oh, we have a lot of this regulatory stuff, et cetera. So a group of us created a cooperative investment club which there's kind of a carve out in the law that regulates kind of investment companies or if you get a group of under a hundred people, you don't pay anyone to make decisions for you and no one owns more than 25% of it, you just create an LLC, you can all put money into a pot and then vote on where to sort of invest that money, right? And so kind of having something where it says, okay, well, you know, this becomes kind of an incubator for other projects that then we can sort of, okay, well, here's these other projects that has kind of the high risk, first money is in. Will you come on as the mortgage lender? Will you come on as the equity investor? Things like that. And then, you know, and similarly kind of like out of that, we're sort of trying to create a real estate cooperative that will sort of be a consumer co-op that holds and rents real estate to its members. But I see in general sort of the strategy being that it's something where you can either kind of go in the direction of, okay, we want to like capture an institution and sort of redirect it or at least kind of build, if not capture, or build significant influence and redirect it towards these sorts of projects. Or you sort of like compliment that with doing the things you want to see on a smaller scale, but in a way that sort of can influence the direction of these sorts of institutions. So that's kind of kind of in terms of my thinking about how to engage, you know, that's key. And then there's also the sort of policy question of, okay, what are the things that limit the autonomy of these organizations that theoretically are able to really work for us like these credit unions? Right? And sort of pushing on the, and providing kind of aid on that policy perspective to say, hey, wouldn't it be nice if that business lending cap was raised or didn't exist? You know, wouldn't it be interesting from that ecosystem building perspective if you were allowed to create an unfedrally insured state chartered credit union that would have to be able to be a lot more flexible in terms of what it could do. So, you know, nudging the laws in that direction. And then like even on the state bank front, right now the state treasurer is not allowed to use credit unions as a depository for state funds, despite the fact that, you know, they can deposit money in TV bank, they can't deposit money in the NVSECU, which is owned exclusively by Vermonters on a cooperative basis. So I see that as actually one fairly low hanging fruit thing that, you know, on the sort of kind of from the impetus of the state bank style thing of just being like, look, there's a huge, huge amount of depository dollars. Those depository dollars would still be federally insured, but there's just a law in place that says as the treasurer can't put that money in credit unions. You know, I think that to me, that's something that with a little bit of pushing, taken out of the way and could have a potentially significant impact. So those are kind of just a few thoughts of how, you know, from that sort of strategic perspective, how you sort of move institutions in this direction. So that opens up a very big question, which is, and I thought I was right here and I'm getting different opinions from different credit union people and the Bank of North Dakota, the same kind of fuzzy information back. If you're not chartered by the federal government, why can't Vermont put money in the Vermont State Employees Credit Union? What is stopping them other than this kind of, oh my God, I can't cross the double line on the highway. What, what is stopping them? So there's, one is the existing law, but of course if there's an existing law, what's the barrier to changing the law? And the barrier to changing the law is, you know, the existing banks and, you know, they have a lobbyist with that's something that they would definitely put political capital into opposing, right? Oh, sure, well I've gone head to head with those people. Yeah, so to me that's the kind of, you know, but I think it's also just the sort of question of, all right, is there the political will? Is there a sort of, and in many cases with those sorts of like small, wonky regulatory changes that 95% of people wouldn't hear about or really care about, right? It's just sort of having a sort of group, a coalition of people sort of decide that that's a piece on the chessboard we want to move, and then putting the effort and horsepower into making it move. Okay, so you're saying that even though the Vermont State employees' credit union is not chartered by the federal government, there is a law prohibiting them from receiving state, putting the state of Vermont from putting money into credit union. Okay, there seem to be some laws that if you're connected to the federal government apply to you, if you're not connected to the federal government through the FDIC and all that, those laws don't apply to you, but am I making that idea up? I mean, there's probably some stuff there, but like in terms of what, in terms of the specific barrier that exists to sort of like taking that action, it's my understanding is it's just, it would need a change to the Vermont statutes and then the treasurer would have the power to do that if she wanted to. Because right now she's just putting it in like TD Bank. That's the major bank for the state right now. Yeah, well we went head to head with her for a long time, and we won, we got the 10% for Vermont and different money is indeed, it's not all going into TD Bank now. Yeah, it's being sort of stripping a little bit more. In the meantime, but we had a long fight with that, and we had a partial victory with this thing called 10% for Vermont. But still she would be, it would be against Vermont law, but not federal law to put state money in a credit union. Okay, so the next activist movement that you and I and you know, Gwen Halsmith and John Ford and that crowd could get involved in would be changing the Vermont law to allow the state to deposit money in a credit union. Yeah, I think to me, and that's something that even in the broader co-op movement in terms of, okay, if there's a general sort of legislative push to be like, hey, let's update the consumer co-op statute and the worker co-op statute and other things like that. If there was a coalition that could come together saying like, this is the five bullet points of the Vermont co-op movement would like as our legislative wish list, that could bring a lot of folks to the table who might not even be sort of, this would be outside of their general sort of purview of what they're thinking about, but would be a way to kind of combine the political capital of a bunch of different groups to sort of accomplish this. And then Chris Delia would have an earthquake in his head. Yeah, he would not be pleased by that. A volcano would come out of his head if that started to make progress through the legislature, which some of our things did make a lot of progress and then they were, I could say mysteriously to be polite, but there was a certain amount of corruption involved whereby there's a lot of ways, it's a complicated multi-step process and there's a lot of steps in that process that things can get derailed, right? Through procedural things too, right? We followed them. We followed our study bill from the government ops to finance and whoops, it didn't get passed along to appropriations and there's no reason. Oh, we don't know, it just didn't get passed along. Right. Well, I know why. In terms of things that I see as kind of low hanging fruit it's not something that would be totally earth-shattering but it's more of an incremental reform but nonetheless could have a significant impact on shifting the balance of power of the sort of finance like where the financial power of the state is deployed. Like to me, I see this as kind of as one of those ones that feels winnable. Well, we won five to nothing in one committee, six to one in another committee and then it wasn't passed on. So we had a huge victory except that there's the corruption occurred from the chair of the committee not passing it on to the next committee which has to do with the treasurer and him and I guess a little arm-twisting from somebody who's sort of in the shadows and I would assume that that would be the lobbyist from the state. I mean, I've already said his name but I won't say it again because we don't want work to be sued. I've been through the legislative process on some things and even when it's like a fairly uncontroversial thing where there's no one really opposing it, it's all about kind of getting momentum and getting people who have a sense of ownership of the thing going through because otherwise it's just like, okay, we have all these things on the wall, which ones should we put attention to and which ones can we just let drop, right? So it's a process. Yeah, well, we've both been there and talk about low-hanging fruit. I mean, the things that we gave up on because it was too high up on the tree and the things that we then focused on were so obvious and so beneficial to the state and they still didn't get them. They were still ordered to lie or they were somehow not passed on but the actual people in the legislature were very helpful and we got pretty far but somehow there's a little corruption here and there and mysteriously these things don't go forward and you've just explained why. A little bit of momentum in the direction that would benefit the public is very upsetting to the bank lobby so that seems to be what has happened. And by the way, I love your word there. You either capture the institution or you compliment the institution and I've been often thinking of running for the board of the Vermont Employees Credit Union but I don't have the time. That's one where with the, a lot of credit unions as they merged sort of the board elections became a formality but the VCCU for complicated reasons has actually been able to maintain a pretty sort of open system where they actively encourage folks to run and there's usually more candidates in seats which is like for a democratic organization is definitely a sign of health. Yeah, so those would be the things that, what we've talked about today are the things that would help a community. Now, here's a political hot potato for you. Let me see what kind of time we have here. Whoops. Yeah, we're at 11.07 so I'll need to. No, it's not 9.11 today. I'll need to jump off fairly soon. Okay. But yeah, if you want to throw me, throw me one more question. Yeah, I'll live in a way. So, Vida, the Vermont Economic Development Association I've been in there, I've spoken to her, she doesn't know what a bank is but she claims to be the Vermont State Bank and it's been a very frustrating process and I've almost come to the conclusion that it's an irrelevant institution. They deal with pass-through money only, they take money and they lend what they've taken and then they take a cut. So, if I wanted to borrow something I would certainly go to a credit union first and I'm a lender personally. I own, I'm part owner of two environmental companies in Vermont. One is AgriLab that turns heat, compost heat, heat into usable heat and land stream which is working to grow soil and prevent erosion and purify Lake Champlain and stuff like that. So, that's just my money being lent. Well, that's all Vida does. It takes money from the state and lends that money out. So, what's- And it all, it takes money from the state and then it also sort of accesses national level capital markets. Oh. And I think that's sort of its, it's kind of like key pieces that it's almost like the state as a bulk buyer of sort of credit from, so it says, all right, we're gonna get this money at 3% and then we can sort of re-lend it at a lower rate than it would be it would be if it was like probably sourced from deposits or investments internally. So, that has been my understanding of kind of their sort of their role in addition, but it's usually with the loans they make, it's usually something where they'll basically buy down, so maybe a conventional lender will lend 50%, Vida will lend 40% and then the entrepreneur or something, it's like 10% down. So, kind of like, is a play at reducing the cost of capital for people kind of starting businesses and that sort of thing. We've definitely been, with the work I do around the conversion of business system for the owners, they're being passed by the legislature in 2006, 2007, kind of instructing them to give priority to lending to those sorts of kind of deals. And it's been, we've had a few examples where they've kind of come in and bought a little sort of piece of a loan. The New School of Montpelier example I brought up earlier was one where they put in a little loan as kind of a piece of the financing puzzle. But certainly that's something where I think there's plenty of room to sort of continue to kind of have pressure on them to sort of have more programs and more focused kind of stuff on really sorts of things that are building sustainable and kind of just economy here. Okay. So, if somebody had a project that was obviously for the public good, well, I shouldn't say obviously because that's a matter of opinion, that you personally and the co-op situations that you're in thought was worthy. How would that person come to you? How would that work? So there's a few kind of different avenues, right? So if it's something where someone's starting a general, a co-op generally, probably the, our consumer co-op or something like that, the Vermont Solidarity Investment Club or Investing Club is sort of the group that we've got together that's everyone puts in between $20 or $200 a month and then the aggregated money. We vote on to invest in cooperative projects specifically. Folks are interested in employee ownership. You know, I work with the Vermont Employee Ownership Center which is a nonprofit that provides kind of education, assistance and has a small revolving loan fund as well. So a worker cooperative or an employee stock ownership plan for a company. So veoc.org is how to kind of find out more about that. V, say that again. veoc.org, the Vermont Employee Ownership Center. Okay. So, and yeah, it's certainly, you're in the midst of starting this real estate co-op. So a lot of my work has been around this building and the ecosystem of different players or different types of institutions that can kind of help make it easier for these sorts of businesses to both get going and to expand and to convert and all of that in terms of how we organize capital. Sort of on a, you know, on a generative basis rather than an extractive one. So you would put yourself, you'd put your, the hat on, that evaluated the viability of a, the financial viability of a project as well as the social viability of a project. All right. And if you thought that there was a reasonable chance that the money would come back to you and if you liked it for social reasons, then you would talk further with the entrepreneur or entrepreneurs or if you like the French entrepreneurs, if it's female, then that would be a discussion. Yeah, I'm thinking about what are the kind of resources and players in the broader field here that could kind of into helping make, make something like that happen? Because several Vermont movies have been made and you may know that we just finished, we have one playing now in Vermont called Made in Vermont. Have you heard of it? I have not, but I should look it up. Okay, yeah, the trailer is available. I can send you the trailer, but it's played in Burlington and Montpelier and St. John'sbury and Middlebury and I think it's coming to Waterbury. I'm not sure about that. That's an LLC paid for by those of us who made the movie and it was very low cost because everybody volunteered time and there's actually some reason to believe that we might almost break even even if we stopped soon with that. Anyway, but that's the kind of thing somebody could come with his hat in his hand and say, Matthew, here's another movie that we're gonna make, what do you think? The sort of things that I'm particularly interested in I think are structured as cooperatives, right? So, you know, and I can, there's certainly a broader ecosystem of things that are for that general kind of, things that have social good, but in terms of my personal sort of interests that's really around that, right? Does this create sort of broad-based democratic ownership or is it structured in a way that does that amongst the participants? So that's in terms of things that I really geek out out about and get excited about, that's the core for me. Well, a movie could be structured exactly like that, right? Yeah, there's cooperative media companies and things like that, so. All right, well, I'll be in touch regarding our next one if only to pick your brain. For sure. But I don't know. Looks like I've got a call coming in. Okay, well, thank you. Your guests have been Matt Crop. This is the house at Poo Corner and we have four minutes left, but we'll let Matt go to his call and thanks a lot, Matthew Crop. So here we are and I don't know whether you want me to wrap this up for four minutes. Okay, I will keep doing that. So your guest was Matthew Crop. He's an expert in credit unions and we're very happy to have him on today because I personally had a lot of questions about what credit unions do, how they started, and what they might be able to do in the future and Matt was very helpful in answering those questions and when you see it on YouTube, which you are doing right now, I would advise you if you had questions, play it again because he pretty much answered a lot of the tricky things that credit unions actually do, actually can do but maybe don't and might be able to do in the future and it's pretty exciting when you think of how some of these activities that a credit union can sponsor and actually do are generally helpful to the community and the exact opposite occurs with commercial banks because they can only invest in something that they know or are reasonably sure will pay them back and so this has been a very interesting conversation for me as I learned some of the possibilities and the time is two minutes and okay, we have three minutes so let me go on to tell you what I'm working on and how I'm gonna be continuing these discussions about monetary reform and what has happened over the last several hundred years when it comes to the creation of money and what that money has been used for. As you may have heard me say at the beginning of this program I'm writing a paper now called All Wars Are Bankers Wars and I'm calling it that because there is a financial aspect to every military adventure because we live in a world of debt money. That's another discussion we've had several times actually. Money is in existence because it was lent into existence in the Western world since 1694 and when a bank sees an opportunity to make money it doesn't matter whether it's sarin gas or the F-35 or whatever it is if a bank can lend money and be certain, reasonably certain that that money is coming back then that's what the bank will do and in the case of wars, banks lend on both sides frequently and the side that loses has to pay reparations and guess where those reparations go to the bank and maybe something else as well but reparations from the loser go to the bank and from the winner, well guess what they do after they get paid back then they send their constabulary, their constabulary has already destroyed a country now they send their constabulary and their businesses into rebuild the country so that's a very simple and accurate way of describing how banks make trillions of dollars by creating the war, fighting the war and rebuilding the country there's a lot of money in that and it doesn't help you and it doesn't help me you'll hear that crap out there that war is good for the economy it is not, it destroys the economy it builds the military industrial complex it builds up the arms manufacturers and it builds up the banks but it doesn't help you and it doesn't help me not to mention the fact that it kills people and destroys cultures checking the time, here we are thanks for listening to the House of Buch Corner with Jim Hogue, bye bye.