Consumers Deposits are Safe at Credit Unions
The collapse of Silicon Valley Bank (SVB) on Friday is the second largest failure of a financial institution in U.S. history. The bank was close and put under the control of the FDIC following a 48-hour bank run and capital crisis. While this was not a credit union failure, the news may still create consumer concerns in New Jersey, Pennsylvania, and nationally. CrossState has developed a few talking points for credit unions that may receive questions from credit union members or the public:
- SVBwas a niche bank serving the technology industry, including tech start-ups, entrepreneurs, and venture capital firms. The bank was focused on a limited sector, which significantly increased its risk profile. Signature Bank was one of the main banks for cryptocurrency companies. Their banking business is completely different from that of a credit union.
- Federally insured credit unions offer a safe place for credit union members to save money. These deposits are protected by the National Credit Union Share Insurance Fund and insured up to at least $250,000 per individual depositor – the same as any other federally insured financial institution (e.g. FDIC).
- Credit union deposits in federally insured credit unions are safe and secure. All New Jersey and Pennsylvania credit unions are federally insured.
- Credit unions are regularly examined by their financial regulator to ensure proper operational management and maintain the safety and soundness of members’ money within the institution.
- Credit union members have never lost a penny of insured savings at a federally insured credit union. Credit unions insurance fund has the backing of the full faith and credit of the U.S. government.
- Please visit MyCreditUnion.gov for more information about the National Credit Union Share Insurance Fund coverage for consumers.
As seen in the most recent release from the NCUA’s Quarterly Data Summary Report, credit unions are in a strong financial position. If your members or employees have concerns regarding the safety and soundness of the credit union or its system, please assure them using the above talking points. If you have further questions or concerns, please contact and utilitze CrossState as a resource for both your members and staff.