NCUA, CUNA respond to bank failures: CU deposits remain safe, insured
The collapse of Silicon Valley Bank last week is the second largest failure of a financial institution in U.S. history. The bank was shut down and put under the control of the FDIC following a 48-hour bank run and capital crisis. Regulators also shut down Signature Bank March 12.
While this situation does not include any credit union failure, it may still create consumer concerns and questions for credit unions.
“The credit union system remains well-capitalized and on a solid footing. The National Credit Union Administration continues to monitor credit union performance through both the examination process and offsite monitoring, and it will continue to do so into the future,” said NCUA Chairman Todd Harper. “Credit unions have access to a wide range of liquidity sources. The NCUA, along with its Central Liquidity Facility, is able to provide a back-up source of liquidity to member credit unions as needed.”
“CUNA continues to engage with policymakers in Washington, D.C., and coordinate with our League partners to ensure credit unions have the resources they need,” said CUNA President/CEO Jim Nussle. “The credit union difference means that credit unions act with the best interests of member-owners at heart, and credit unions will continue to meet member needs.”
CUNA supports the Central Liquidity Facility Act (S.544), sponsored by Sen. Alex Padilla, D-Calif., and Kevin Cramer, R-N.D., that would extend agent membership access to NCUA’s Central Liquidity Facility for three years.
CUNA also provided key points on the credit union difference and insurance coverage:
- As not-for-profit financial cooperatives, credit unions’ first priority is members’ financial success and security.
- Federally insured credit unions offer a safe place for credit union members to save money, 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.
- Credit union members have never lost a penny of insured savings at a federally insured credit union.
- MyCreditUnion.gov contains more information about the National Credit Union Share Insurance Fund coverage for consumers.
Additional information on NCUA’s Central Liquidity Facility can be found here.