Massachusetts credit unions can now accept deposits above the $250,000 insurance limit under a new law that went into effect last week.
The measure was filed by the Massachusetts Credit Union League and had the backing of the Massachusetts Credit Union Share Insurance Corp., a nonprofit that insures shares and deposits.
"Now Massachusetts state chartered credit unions will have the opportunity to meet the savings needs of all of their members," said Daniel F. Egan Jr., president/CEO of the league. "And those members will be free to make a choice as to where they would like to save without being subject to an arbitrary and outdated limit."
Officials of MSIC said they expected CU ads to begin appearing this month promoting the deposit cap. Federal CUs in Massachusetts have no limits. The new law was signed by Gov. Duvall Patrick in August but made effective Nov. 7.
"In the midst of a 100-year financial crisis, consumers are now more than ever seeking financial protection in insured credit unions," noted MSIC, which is a CU-owned entity chartered in 1961 by the state.
MSIC noted also that it was created "to provide share and deposit insurance years before the NCUA would create a national deposit insurance fund." In 1991 it converted from a primary insurer to exclusively an insurer of excess shares and deposits and currently insures 76 state chartered and 23 federal CUs in Massachusetts.
"Our member credit unions have avoided the problems which caused the current financial crisis," said Michael Hanson, MSIC president/CEO. "MSIC credit unions are part of the solution to the current financial mess. Their lending continues to grow, thereby helping Massachusetts consumers and small businesses get the credit they need to improve the local economy."