WASHINGTON—The safety and soundness of credit unions was emphasized by NAFCU and CUNA, which each submitted letters to the Senate Banking Committee ahead of its hearing this week to examine the Silicon Valley Bank and Signature Bank collapses.
In NAFCU’s letter, Vice President of Legislative Affairs Brad Thaler emphasized that the credit union industry “remains a strong, well capitalized and safe place for consumers,” touting the unique non-profit, cooperative structure of credit unions.
Thaler added that while banks only have roughly 50% of deposits insured by the FDIC, over 90% of credit union deposits are insured by the NCUSIF.
“Credit unions haven’t seen runs on their deposits like some banks because of the relationship they have with their members – who know their money is safe at their credit union,” wrote Thaler. “That’s the credit union difference. Our industry prioritizes members’ financial well-being over profits.”
CUNA’s Letter
Meanwhile, CUNA pointed out that “community-focused credit unions” did not cause the collapse of one of the largest regional banks in the country and should not face more federal regulation or increased fees due to these banks’ actions.
“With more than 91% of credit union deposits insured, credit unions remain stable, safe and secure during this time of uncertainty in the banking sector,” the letter reads. “The credit union difference makes us stronger by helping improve the financial well-being of Americans nationwide. Credit unions are member-owned, not-for-profit financial cooperatives that put our members ahead of the bottom line.”
Challenges for Privately Insured CUs
The letter also highlighted issues privately insured credit unions have had accessing the Federal Reserve’s Bank Term Funding Program (BTFP), which the Fed has limited to federally insured credit unions.
“Privately insured credit unions are state‐chartered, state‐regulated and subject to the same regulatory requirements as are state‐chartered, federally insured credit unions in their respective states. In all aspects, privately insured credit unions are regulated like all other state‐chartered credit unions, except they are not federally insured,” the letter reads. “CUNA strongly encourages the Federal Reserve to allow all credit unions, regardless of the source of their deposit insurance, to access the BTFP…”
It’s Called Fresh for a Reason. And We Offer Home Delivery. For Free!
The biggest, best and freshest news reporting in credit unions remains free in ’23! Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more.
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance you didn’t know was coming.
And did we mention it’s free?
Please note and/or make your IT department or email administrator aware the emails will be coming from the domains CUTodayinfo.com and CUTodayinfoReply.com