Forget Banks, Join the Credit Union

Credit unions, not-for-profit financial institutions owned by their members, may be among the safest financial institutions in the nation, despite our nation’s current economic struggles. And as a result, they are gaining recognition among consumers as well as on Capitol Hill for not only having avoided the problems that created today’s financial mess, but for being a huge part of the solution.

“In the wake of the Lehman Bros. and Merrill Lynch debacles, many consumers are becoming more and more concerned about the financial soundness of their financial institutions,” said Guy M. Hood, President/CEO of the Florida Credit Union League (FCUL). “Where some financial institutions are reeling from the economy, credit unions are not. There has also been some hype about money in credit unions being unsafe, when, in fact, it is just as safe being insured with the National Credit Union Association (NCUA) as money with FDIC.”
Credit union deposits, called shares, are insured by the National Credit Union Administration (NCUA), a federal agency offering deposit account coverage just like the FDIC, to at least $100,000 per insured account. Although there have been many news that have focused exclusively on FDIC insurance at banks the federal insurance provided by NCUA for credit unions has often been overlooked.
Recent segments on CNN and other news shows as well as an article in Politico magazine on Capitol Hill recognized credit unions as strong and secure institutions that avoided the bad lending practices that caused today’s financial crisis.
According to the Credit Union National Association’s (CUNA) Senior Vice President Research Chief Economist, Bill Hampel:
    *Credit unions are in very good shape although it’s not pleasant with low earnings.
    *

      This year is the lowest earnings seen in the history of credit unions due to rising loan losses but credit unions are still very well capitalized.
    *      With the weakening economy, consumers are spending less but saving more, therefore loans have slowed down but saving deposits have increased at credit unions.
    *      Delinquencies are up but low in comparison to other financial institutions. Last year the rate was at .02 percent, this year, .06 percent.
    *      Credit unions are still lending while others are not however, as always, they are prudent lenders.
“When it comes to personal finances, credit unions are here to serve, to counsel, and to protect their membership compassionately,” said Hood. “Florida’s 4.5 million credit union members need to know that as long as their individual accounts remain within coverage limits, their funds are safe.”
The NCUA website, at www.ncua.gov, has additional tools to help consumers determine the coverage on their accounts as well as brochures and bulletins that detail coverage for regular savings and retirement accounts and more.

(The Florida Credit Union League is a Tallahassee, Florida-based statewide trade association offering a myriad of services focused on meeting the current and future needs of Florida’s credit unions. It is the mission of the Florida Credit Union League to ensure an operating environment in which credit unions will thrive.)

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