LAS VEGAS – Nevada's largest state chartered credit unionconverted from federal insurance to private insurance, becomingAmerican Share Insurance's second largest client. Silver StateSchools Credit Union, with $647 million in assets, is the thirdcredit union to join American Share Insurance this year. ASIPresident and CEO Dennis Adams emphasized that his company performson-site examinations at its seven largest credit unions twice ayear, which would include Silver State Schools. The other twocredit unions to join ASI this year were DuPage Credit Union(Illinois) and Landmark Credit Union (Alabama). ASI offers $250,000worth of coverage per account as opposed to the National CreditUnion Share Insurance Fund's $100,000 per accountholder. SilverState Schools CEO Dave Rhamy explained, “The thing that led up toit was, we had [ASI's] excess insurance through their subsidiaryESI (Excess Share Insurance), and we topped out.” The credit unionlooked at restricting membership or what types of accounts wouldeligible for excess insurance, but there did not seem to be a goodway out, he said. Actually, the credit union had been looking atthe private insurance option since it converted to a state charterfive years ago, Rhamy, who has been with Silver State Schools since1999, said. Following this initial conversion, he said, NCUA reallydid not change its ways in terms of examination. “It appeared to methat they didn't take any different approach than when they werethe primary regulators,” Rhamy said. However, he emphasized, thiswas not the primary factor in the decision to convert to ASI. Rhamyadded the conversion process “went very well. It went exceptionallywell. It was far better than I imagined.” He said he was initiallyconcerned about getting 20% of the membership out to vote sinceonly 10-12% voted in their board elections. However, with ASI'shelp, 37% of the membership voted on the decision with about 63% infavor of the switch, Rhamy said. He noted that there were noproblems with NCUA during the conversion process and the federalregulator even made calls to the credit union to make sure theywere doing everything correctly. The credit union is still waitingon its $5 million refund check from NCUSIF though, Rhamy pointedout. The controversy regarding private insurance among creditunions flared up a couple of years ago when the then just under $3billion Patelco Credit Union (California), headed by former NCUAChairman Ed Callahan, was-and remains-the largest credit union toconvert to private insurance through ASI. NAFCU has placed itselfsquarely against private primary deposit insurance, while CUNA andNASCUS are in favor of maintaining the option. –[email protected]

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