Credit Unions Are Safe and Sound

In this environment, it’s no surprise that prudent consumers are unsure about mortgage lending and cautious about their money. Fortunately, credit unions have strong answers to members’ and consumers’ safety questions. According to CUNA:

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 total dollars, that’s a capital cushion of $90 billion.

Credit unions have steered clear of the subprime mess.

• Credit unions operate more conservatively and tend to hold more of their mortgage loans (about 70%) in portfolio rather than sell them to Fannie and Freddie on the secondary market.
   
• Also, credit unions are member-owned, not-for-profit cooperatives. Unlike some banks and brokers, we’re not out to push loans on our members just to make a quick buck.
   
• Today 56% of credit unions offer first mortgages, and 90% of the nations’s 90 million credit union members belong to one of the credit unions that offer first mortgage loans.
   
• Credit unions went into this with strong balance sheets, and they’ll still be strong when it’s over.

Virtually all credit unions are federally insured by a fund that, like the FDIC, is backed by the full faith and credit to the U. S. government.
 
 As the FDIC does for banks, the National Credit Union Share Insurance Fund (NCUSIF) insures savings to at least $250,000 for all types of savings accounts.
 
The NCUSIF is administered by the National Credit Union Administration (NCUA), an agency of the federal government.
 
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.

South Metro FCU provides an additional $150,000 of coverage at no cost to you. That brings your total deposit insurance coverage to $400,000. Find out more!