@stan_the_man wrote:
@nomoore wrote:
Being insured by the NCUA (governmenet) is not nessarily a great thing. The NCUA has to insure everyone, even the ones that are not financially secure. They can't pick and choose who they insure like American Share Insurance can. ASI reviews the financials for all the CUs they insure to make sure they are sound before they accept an app for insurance. So there is a higher chance that they are pretty financially secure. Also, a CU insured by ASI often covers more accounts and covers more money in those accounts. The NCUA covers $250,000 per "member". The CU I work for considered converting to ASI and if we had converted it would have provided the members with $xxx,xxx (sorry I don't remember the figures but it was at least $250,000) per account type that they had, thus $xxx,xxx for each type of checking, each type of savings, each type of money market, etc. If you are going to put a LOT of money in a CU then you might be better insured with a credit union that uses ASI.
For all intents and purposes, NCUA's National Credit Union Share Insurance Fund should be considered guaranteed by the federal government up to the cap of $250,000 per account. Since the NCUSIF is backed by the full faith and credit of the U.S. federal government, if they can't cover the insured account we're all in real big trouble.
Now, there are CUs out there that layer ASI's Excess Share Insurance on top of the NCUSIF, which would insure your deposits beyond $250K per account.
"Backed by the full faith and credit of the U.S. federal government" doesn't mean much to me when I see the NCUA charge all its remaining insurees an extra Premium on top of their normal premiums to refill the NCUSIF to make up for all the failed credit unions from the bad economy we've had. They have done this the last 2 years in a row.
2009
2010
I can't say ASI or other insurance providers are immune to this but if you compare the history of the NCUA to the history of ASI you will see that the NCUA has charged these premiums much more often. And it's not like we're comparing a third rate insurance company to a first rate company. ASI has been around for a LONG time and if they had a habit of not paying up then they wouldnt be around. It's not like car insurance were some people just get the cheapest and hope it pays if they need it because they can't afford better. To switch away from NCUA you have to get the approval of the CU members. That means you have to do your research and give some VERY good reasons to switch because "Backed by the full faith and credit of the U.S. federal government" means a lot to a lot of people.
I don't understand why people put so much faith in the government though. It's our own taxpayer dollars that pay for it. Sure the government could print up a lot of money and hand it out except that would cause the value of the dollar to decrease which would be detrimental to the economy. When a CU fails for whatever reason, no matter who is insuring it, the remaining insurees pay, just like any auto, home, or life insurance. This is the way that is most logical for it to work and the way it DOES work. I mean would you want to pay the government extra taxes or have your money devalued because some stupid CU managers somewhere didn't do their job and made bad decisions on loans? There's plenty of other ways that has already affected our economy without asking the government to devalue our dollar or to charge everyone extra taxes.
There are plenty of things to look for when choosing a credit union. But don't limit yourself to only those that are insured by the NCUA just because it is "backed by the U.S. federal government".
Open Credit Cards: Target Visa/5900CL | AMEX BCP/6000CL
Latest Credit Scores: 780 TU (2011-08-01)
Credit Score History: 708 EQ (2011-07-01) | 682 TU (2011-06-30) | 693 EQ (2010-05-21)
