The news of two bank failures has rocked the financial services and tech worlds. Over the weekend banking regulators closed two banks: the $206 billion Silicon Valley Bank (SVB) and the $110.4 billion Signature Bank in New York. SVB’s collapse, the second largest bank failure in U.S. history, played out with a bank run, a result of uninsured deposits and mismatched investments.
It’s important to note that credit union members have never lost a penny of insured savings at a federally insured credit union. Deposits are protected by the National Credit Union Share Insurance Fund and insured up to at least $250,000 per individual depositor, the same as any other federally insured financial institution. Further, the largest credit unions are required to have liquidity coverage of at least two times their asset size.
Cornerstone has created a webpage that provides safety and soundness talking points, social media graphics, and more resources to help credit unions reassure their members. The most important message we can send is that credit unions are well-capitalized and a safe place for consumers’ funds.
NCUA Chairman Todd Harper states, “The credit union system remains well-capitalized and on a solid footing. The agency continues to monitor credit union performance through both the examination process and offsite monitoring, and it will continue to do so into the future. The NCUA, along with its Central Liquidity Facility, is able to provide a backup source of liquidity to member credit unions as needed.”
Cornerstone League will continue to monitor the story as it develops and keep you abreast of credit union impact.
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