Testimony to the Committee on Finance, Chicago City Council

November 14, 2011

Honorable Aldermen:

Thank you for this opportunity to speak to you in favor of the TIF District Jobs & Housing Recovery Credit Union Program Ordinance of 2011. [Which creates a credit union associated with each City TIF District. Click here to read it, obtained from the City Clerk’s website].

And thank you, Alderman Fioretti, for introducing it. I’m a proud constituent.

I’m proud because this proposed ordinance is many times better than presidential candidate Herman Cain’s 9-9-9 plan. I call it the 99-99-99 plan.

It benefits the 99% of us who use banking services by giving us better terms for holding our money, both lower costs and higher returns.

It benefits the 99% of us who are or want to be workers, by putting more of us to work, which also benefits local businesses.

And, most important, it benefits the 99% of us who are taxpayers and users of City services by increasing City revenues without raising tax rates.

Let me explain. Increased economic activity boosts revenues from sales and property taxes, but there’s another important way these credit unions could provide more income to the City.

Banks have investors, and have to pay them a return from the bank’s profits. But credit unions don’t have that obligation. The charters of the credit unions could be structured so that not only do the depositors and borrowers benefit from what would have gone to investors, so could the City of Chicago.

Every day, we open our Tribunes and our Sun-Times and our Crain’s Chicago Business to find articles about draconian measures being proposed to bring the City’s deficit down. Every evening on our local TV channels we see stories on the same cuts, plans to put out of work the people who provide vital services—police, fire fighters, teachers, health center employees, and more.

There’s a huge problem with this approach. It’s not only difficult from a humanitarian standpoint, it’s economically contractionary. It will reduce tax revenues. Fewer people will be able to buy in local stores or pay their property taxes.

Now, here, you have a creative idea that, if you implement it, could reduce or even eliminate the horribly difficult budget reduction decisions that you and the Mayor are wrestling with.

And there’s no limit to the kinds of financial services the credit unions could offer, depending on how their charters are written—check cashing services for non-members, payday loans, micro lending, and even  providing credit cards to members. All of these services can add revenue to the City’s coffers.

With interest rates at historic lows, there will be no shortage of depositors to a credit union that offers a higher return.

We ordinary Americans have seen that we can’t depend on Washington for solutions to problems we didn’t even create. We’re looking for local answers, instead. There is more and more local energy production using solar, wind, and even fuel cell technologies. There may even be more local food production—on rooftops. With this ordinance, you can pave the way for more local financing, with local control.

America is changing, and this ordinance gives you the opportunity to be at the forefront of that change.

Remember the 99-99-99, which includes you!

Carolyn Kay
MakeThemAccountable.com

Update: One of the Aldermen wanted to know how a program like this could work, since government can’t do things right. I asked, “Do you mean Social Security? Medicare? Goverment programs certainly can work.”