Wednesday, July 16, 2008

It's a Wonderful Life (in Credit Unions) so Don't Panic!

Savvy Saver must admit - I am a bit in shock today. After-all, did you ever think that YOU would see a "run" on a bank in your lifetime? I certainly didn't think so. I mean we've all seen "It's A Wonderful Life," a tried & true Christmas Movie centering around a frightening "run" on poor George Bailey's family-founded S&L that could have caused the downfall, not just of the S&l, but the entire town (and we will not even discuss the evil rich skinflint, Mr. Potter... boo ... hiss).

After-all, we tell ourselves, the movie is set in a time before the wonders of the FDIC and NCUA insurance funds. And quite frankly, those of us in the business of managing money are well aware of the current safety of American deposits.

But it appears that the typical California Consumer & IndyMac Bank customer is not so aware that their deposits are protected with the FDIC. And that is unfortunate.

So I, Savvy Saver, want to get the word out on how well protected Credit Union Members' deposits are through the NCUA (FDIC's cuter younger sister agency) . After all, the NCUA's insurance fund, the NCUSIF, is historically not only stronger, but more fully-funded than the FDIC due to credit unions' not-for-profit cooperative structure.

As John Radebaugh, President of the North Carolina Credit Union League will tell you, "....credit unions remain healthy due to key differences in their structure compared to banks, they (credit unions) are not reliant upon capital markets for funding - but instead are funding through member deposits." Additionally he states that "credit unions did not make risky loans like others did, so their loan portfolios are performing well despite the economy." (For even more information on the safety and soundness of credit unions, and John Radebaugh's full comments click here.)

So, my simple bloggin' post to you today is - thanks to the NCUA, your deposited money is safe at your credit union...... and yes... even that darn "Mr. Potter" bank, thanks to the good ole USofA and the FDIC!