 Janice Jones, President/CEO
President Bush Signs H. R. 1424 Into Law
On Friday, October 3, 2008, the President signed into law: H.R. 1424, the Emergency Economic Stabilization Act of 2008, Energy Improvement and Extension Act of 2008, and Tax Extenders and Alternative Minimum Tax Relief Act of 2008, which authorizes the Secretary of the Treasury to establish a Troubled Assets Relief Program to purchase troubled assets from financial institutions; provides Alternative Minimum Tax relief; extends expiring tax provisions and establishes energy tax incentives; and temporarily increases Federal Deposit Insurance limits.
Three very important points to remember about this new bill:
Ø The increase to $250,000 is TEMPORARY until December 31, 2009
Ø Insurance coverage can actually be much more than $250,000 – depending on account ownership
Ø IRA's insurance limit remains at $250,000
Dan Mica, CEO of CUNA, says: “By being included in this provision, credit unions remain on the same level as FDIC-insured banks in terms of deposit insurance coverage. This is vital to maintaining member and public confidence in credit unions as safe, sound and solid financial institutions. CUNA will continue to work vigorously with the goal on ensuring credit unions are seen as safe and solid, are not put at any disadvantage, and receive the same level of protection as banks”.
Credit unions were not at the root of the problems that ultimately led to this legislation; they have been – and continue to be – responsible lenders. This stands in place at United Southeast – we are responsible lenders following policies approved by USFCU Board of Directors and our policies are examined and audited by the National Credit Union Administration (NCUA) and our independent auditor.
Senator Corker spoke with the Tennessee Credit Union League (TCUL) and officially recognized that credit unions had not participated in or caused the situations that resulted in the current credit crisis. He stated that we had been doing the “blocking and tackling,” and a good job of not getting over extended or into improper business practices. In his opinion, it was necessary and the only option currently available to protect all of us against getting caught with high financial losses and limited availability of capital in the future. Tom Gaines, President of TCUL said “The important points for us are that a United States Senator called credit unions to specifically commend us for the way we have behaved and conducted business and to explain the position he took on a very unpopular issue.”
Fred Becker, President of National Association of Federal Credit Unions (NAFCU), says “This legislation ensures that credit unions can continue to offer their members the competitive rates and great service they have come to expect, with their deposits fully insured up to the new amounts by the U. S. Government.”
Stay tuned for continuous updates
NCUA Media Release
$250,000 Share Insurance Protection Extended to 2013
May 26, 2009, Alexandria, Va. – The Helping Families Save Their Homes Act of 2009, signed into law May 20, 2009, includes a provision extending $250,000 share insurance coverage provided by the National Credit Union Share Insurance Fund through December 31, 2013. Previously, this level of coverage was set to expire December 31, 2009. The new law also requires NCUA to use the higher $250,000 standard maximum share insurance amount when making decisions about premiums and administering insurance deposit adjustments.
USFCU - Solid Then. Solid Now.
Helping Our Members Live Better Lives includes helping them understand how USFCU maintains a solid financial position and how member deposits are safe.
Due to recent events in the banking and mortgage industries, many members may be wondering if their funds are safe at United Southeast Federal Credit Union. The simple answer is...YES! Your money is safe at United Southeast Federal Credit Union. Since 1941 our regulator, NCUA, has given USFCU high ratings. USFCU is well capitalized. That means that our investments are sound and we have high quality assets. Your credit union has never participated in any type of subprime lending.
Your USFCU deposits are federally insured through the National Credit Union Administration (NCUA). NCUA has been emphasizing the security of federal insurance protection. In July, NCUA issued a media release confirming the secure position of the National Credit Union Share Insurance Fund (NCUSIF), and at the July NCUA Board meeting NCUA's chief financial officer announced that the NCUSIF has a record reserve level. The NCUA Fund, which protects members against loss should a federally insured credit union fail, has an equity level of 1.24 percent. No member has ever lost a penny of federally insured funds held in a credit union.
USFCU member savings are insured up to $100,000. Depending on how you structure your accounts with joint owners and beneficiaries, you can increase your insured coverage. Individual Retirement Accounts (IRAs) are insured separately up to $250,000.
Helpful Resources
"Who is NCUA?" - Share Insurance
"Share Insurance Estimator" - Allows members to estimate the amount of insurance coverage based on scenarios they input.
"How Your Accounts Are Federally Insured" - Provides general information regarding share insurance coverage.
"Your Insured Funds" - Provides a detailed explanation of share insurance coverage along with examples of account coverage.
Share Insurance Tool Kit - Helpful publications
America's Credit Unions: Secure, Strong
with federal insurance, serving as consumer's safe harbors
Credit unions as a whole are healthy, with strong balance sheets.
- Credit unions are well capitalized. Their overall capital-to-asset ratio stands at a very solid 11.1% (compared to 10% for banks). In dollars, that's a capital cushion of $90 billion.
- Credit Union mortgage delinquencies at the end of The first quarter stood at only 0.7%. First mortgage charge-offs were a minuscule 0.06%.
- More broadly, credit union loan delinquencies have edged up, but still are at a very low 1.0%.
Credit Unions have steered clear of the subprime mess. We're still lending responsibly.
-In the first four months of 2008, mortgages at credit unions grew faster than all other loans. This at the time when mortgages losses have forced other lenders to scale back or close their doors entirely.
- Why? For one thing, credit unions operate more conservatively and tend to hold more of their mortgage loans (about 70% in fact) in portfolio rather than sell them to Fannie or Freddie on the secondary market.
- Secondly, credit unions are member-owned and not-for-profit cooperatives. We exist to serve our members, not profit from them. Unlike the banks and brokers, we're not out to force loans on our members just to make a quick buck.
- Today 56% of credit unions offer first mortgages, and 90% of the nation's 90 million credit union members belong to one of the credit unions that offer first mortgage loans.
- To the extent credit unions have been impacted by the subprime debacle, its primarily as "collateral damage" - members having trouble making payments on other loans because of subprime mortgage they've gotten elsewhere, or because some members are losing their jobs in today's down economy.
- But credit unions went into this with very strong balance sheets, and will still be in very strong shape when it's over.
Credit unions are a safe harbor for consumer savings.
- Savings at credit unions so far this year have grown nearly 7%. In today's economy, consumers are increasing their savings in response to concerns about their economic future.
- More people seeking to put their money in a stable sources offering good rates are turning to credit unions.
-As not for profit cooperatives, credit unions typically offer higher savings rates than banks. For a daily rate comparison, go to :http//www.creditunion.coop/ratedex.php.
- Consumers saved $10.9 billion last year by using credit unions rather than banks. The savings come in the form of lower fees, higher savings rates and lower loan rates. That works out to about $126 per credit union member or $239 per household.
Federal insurance covers credit unions, too.
- All credit unions in this state are federally insured by the fund that, like the FDIC, is backed by the full faith and credit of the U.S. government.
- As the FDIC does for banks, the National Credit Union Share Insurance Fund (NCUSIF) insures a person's savings up to at least $100,000 - with higher total coverage available if the member has a combination of individual, joint trust payable-on-death on other types of accounts; there is also separate insurance coverage of up to $250,000 for individual retirement accounts.
-The NCUSIF is administered by the National Credit Union Administration (NCUA), an agency of the federal government. To determine insurance coverage, see the NCUA's insurance estimator at http://webapps.ncua.gov/ins/
- The NCUA recently reported that the NCUSIF at mid-year remained strong, with an equity-to-insured deposits ratio estimated at 1.24% as of June 30 and projected to rise to 1.28% by year end.
-For more information on federal share insurance, see the NCUA brochure "Your Insured Funds," available at http://www.ncua.gov/publication/brochures/insuredfunds/funds.pdf
Presented by Credit Union National Assn. (CUNA), Washington, DC / July, 2008
|
