September 11, 2011:
COACECSS in Spanish is "Cooperativa de Ahorro y Crédito" a
Cooperative for savings and credit. In the US, we call these
"Panama Credit Unions." Panama Offshore Legal Services, Attorneys at
Law, claims the following on their web site:
If this was a safe
bet, you can be sure Bank
of America, Wells
Fargo, Citibank, Chase
and other banks would lend the money to this credit union for 9% rather
than make 15 year home
loans to people in the US for around 3.5%.
- "According to some professionals in the industry,
credit unions are considered to be more secure and less risky than
banks for several reasons."
- Beware of weasel words. The don't cite ANY
sources! Could the professional be the janitor who cleans the
- "Currently, many credit unions are paying as much as
4% interest on basic savings accounts, up to 6% interest on educational
savings accounts, up to 8% interest on 5 year time deposits (CD’s) of
at least $100,000, and as much as 9% interest on retirement savings
accounts. They can afford to pay higher interest rates to their
depositors because they earn higher interest on their loans, and most
credit unions have a very low loan default rate since they make small
loans, require co-signers, and require direct debits from borrowers’
salaries for payments."
- =>We don't see how this makes a loan
safe. We think the ONLY safe loan is one that has FDIC insurance
or other US Government backing.
- Although most Panama credit unions restrict
membership to Panamanian residents.... there are some credit unions
that do accept outsiders, and foreigners are often permitted to open
accounts with those credit unions.
- =>There is the pitch. They probably get a
lucrative fee to introduce you to a banker who will take your money
with the promise to pay a high interest rate. Why does this
remind us of loan brokers selling loans to people who couldn't afford
to make the payments at the top of the housing bubble?
We recommend this ONLY for those who
have "high risk
capital" they can afford to lose. IF you can not afford to lose
this money, then stick to CDs with FDIC insurance.
Back to Alternative
unions are regulated by the “Instituto Panameno Autonomo Cooperativo”
(IPACOOP) website is www.ipacoop.gob.pa
THIS DOES NOT HAVE FDIC INSURANCE