The Relationship of Equity Union(s) to Existing Financial Institutions and Community Betterment Organizations

The role of the Equity Union is to alter the allocation purposes and priorities of the Investment "Class" (i.e. the owners of Banks and Corporations and Traders on Wall Street and similar venues).

While credit unions and banks primarily make mortgage loans, car loans, consumer loans, and in loans to businesses, an equity union (with accounts in a community development union(s)) would specifically be dedicated to making equity grants, equity participation, and equity sharing allocations to community betterment organizations (CBOs).

When a financial organization makes a loan, it has first claim on net revenues. In other words, before a workers' cooperative or a traditional sole proprietorship, partnership, or corporation can pay themselves, they must first pay back the interest (and eventually principal) on the loan.

In an equity union participation (as differentiated from an outright grant), any dividends to the equity union participants would be paid back subsidiary to the interests of the worker owners or community/worker owners of the CBO firm. The arrangement would be negotiable. If the negotiation calls for no dividends, whatsoever, then that would be called equity sharing.

Equity shares/participations in a CBO could not be traded and could only be bought back by the members of the Equity Union at par value. In other words, no capital gains would be allowed.