Credit Unions
en.wikipedia.org
Credit Unions
1–10 of 64 posts
Re: Credit Unions
#2I exclusively use a credit union, but frankly I could not tell you whether it's more or less vulnerable to market instability or bank runs than a larger bank. It might be more stable for the sheer fact of being very local and nobody around here really cares what's going on in big cities or in silicon valley.
Re: Credit Unions
#3I exclusively use a credit union, but frankly I could not tell you whether it's more or less vulnerable to market instability or bank runs than a larger bank. It might be more stable for the sheer fact of being very local and nobody around here really cares what's going on in big cities or in silicon valley.
Not FDIC insured is a big one.
Re: Credit Unions
#4I exclusively use a credit union, but frankly I could not tell you whether it's more or less vulnerable to market instability or bank runs than a larger bank. It might be more stable for the sheer fact of being very local and nobody around here really cares what's going on in big cities or in silicon valley.
Not FDIC insured is a big one.
How is this functionally different?
> What Is the NCUA?
> The NCUA is an independent agency that oversees the National Credit Union Share Insurance Fund (NCUSIF). This federal insurance fund, backed by the U.S. government, insures member savings in federally insured credit unions. Deposits at federally chartered credit unions are automatically insured by the NCUA, but state-chartered credit unions can opt for NCUA insurance too. Some 98% of U.S. credit unions are federally insured. To find out if your credit union is one of them, ask a representative or look for the official NCUA insurance logo in its offices or on its website.
Re: Credit Unions
#5Earlier quoted context omitted.
Not FDIC insured is a big one.
How is this functionally different? > What Is the NCUA? > The NCUA is an independent agency that oversees the National Credit Union Share Insurance Fund (NCUSIF). This federal insurance fund, backed by the U.S. government, insures member savings in federally insured credit unions. Deposits at federally chartered credit unions are automatically insured by the NCUA, but state-chartered credit unions can opt for NCUA in…
It is a different organization entirely. Functionally it is declared the same in all the googling that I've done, but in practice, are they? I don't know, and personally, I don't really want to find out.
Re: Credit Unions
#6I exclusively use a credit union, but frankly I could not tell you whether it's more or less vulnerable to market instability or bank runs than a larger bank. It might be more stable for the sheer fact of being very local and nobody around here really cares what's going on in big cities or in silicon valley.
It seems possible any deposit-taking financial institution could have made the same mistake as SVB, be they a bank or credit union or anything else. I don't think merely being a credit union will shield them from this. They may have some by-laws though that do protect them, but that's on a case-by-case basis.
Re: Credit Unions
#7I exclusively use a credit union, but frankly I could not tell you whether it's more or less vulnerable to market instability or bank runs than a larger bank. It might be more stable for the sheer fact of being very local and nobody around here really cares what's going on in big cities or in silicon valley.
Not FDIC insured is a big one.
This is not necessarily true, there are over 7000 federally insured credit unions in the USA.
Credit unions are required to maintain coverage for all deposit liabilities.
So it can’t be undone by a bank run, but potentially could be undone by theft if uninsured.
Re: Credit Unions
#8I exclusively use a credit union, but frankly I could not tell you whether it's more or less vulnerable to market instability or bank runs than a larger bank. It might be more stable for the sheer fact of being very local and nobody around here really cares what's going on in big cities or in silicon valley.
Not FDIC insured is a big one.
FDIC insurance just means that, if a bank fails, the government will make depositors whole up to a certain amount--printing the money to do so if necessary. NCUA provides exactly the same guarantee to credit union depositors. I see no reason to be any less confident in the NCUA guarantee than the FDIC guarantee; ultimately both are subject to the same risk, that the government will not be politically capable of either raising or printing enough money to make depositors whole in the event of a major financial crash.
Re: Credit Unions
#9I exclusively use a credit union, but frankly I could not tell you whether it's more or less vulnerable to market instability or bank runs than a larger bank. It might be more stable for the sheer fact of being very local and nobody around here really cares what's going on in big cities or in silicon valley.
Not FDIC insured is a big one.
The National Credit Union Administration is a US government agency that regulates and supervises credit unions. They also operate and manage the National Credit Union Share Insurance Fund (NCUSIF), which provides share insurance coverage for credit union members against losses should the credit union fail. The NCUSIF provides all members of federally insured credit unions with $250,000 in coverage for their single ownership accounts.
So pretty much the same coverage, just a different agency.
Re: Credit Unions
#10I exclusively use a credit union, but frankly I could not tell you whether it's more or less vulnerable to market instability or bank runs than a larger bank. It might be more stable for the sheer fact of being very local and nobody around here really cares what's going on in big cities or in silicon valley.
> It might be more stable for the sheer fact of being very local
Being very local (and concentrated on one sector) didn't help SVB. Most credit unions require (or used to) you to be in some industry or union, etc to join. Like teacher's credit unions, etc. So potentially there would be sector exposure. But I think in recent years most CUs have relaxed those requirements (I know the one I'm in did) and allow pretty much anyone to join.