Wanting no part of future NCUA assessments, the president/CEO of the $300 million SafeAmerica CU of Pleasanton, Calif. has opted for private insurance.
"We transitioned into ASI Dec. 28 and we feel this is the right move for us as we take the long view," said Richard Jordan, the SafeAmerica head, in explaining a management decision to switch to American Share Insurance avoiding NCUA expense "as we see those mounting corporate losses."
He said he could not forecast whether other CUs, also alarmed about the costly assessments, would also join American Share Insurance. Comments from NCUA and ASI were not immediately available.
It was apparent, said Jordan, that "NCUA is following the line" of the FDIC in borrowing heavily from the Treasury to pay for the costs, which would mean CUs would share that future debt burden.
Jordan said his CU lost $2 million in the failure of WesCorp FCU and now he is worried about the growing estimates of losses for NCUA's corporate bailout. Jordan said the September board meeting when decisions were made on the 15 basis spread were convincing evidence of where NCUA was headed in hitting on CUs.
SafeAmerica, he noted also, has been a longtime user of ASI services having purchased excess deposit insurance over the years.