FT. LAUDERDALE, Fla.–After NAFCU commented to Washington'sDepartment of Financial Institutions recently that private primarydeposit insurance “threatens” the dual chartering system, it waslike waving a red flag in front of NASCUS.

“State regulators rigorously examine and supervisestate-chartered credit unions,” NASCUS President/CEO Mary MarthaFortney stated. “All of the nation's state credit unions arethoroughly examined and held to the highest standards of safety andsoundness by their state regulator. To suggest otherwise not onlydoes a disservice to state regulatory agencies, but to the entirestate credit union system.”

In his Aug. 7 letter, Becker wrote, “The dual chartering system,which NAFCU fully supports, is a major strength of the financialservices industry and essential to assuring the maximum security ofAmericans' shares and deposits. Currently, state-chartered creditunions whose shares are insured by the NCUSIF are subject torigorous safety and soundness regulations promulgated andadministered by the NCUA, but still enjoy charter options availableto them under state regimes. This flexibility is evidenced by the5,159 federal and 3,146 state chartered credit unions that arepresently federally insured. NAFCU opposes significant alterationsto the current dual chartering and supervisory system. An option tomaintain primary share insurance with a private insurer is asignificant alteration and one that threatens this system.”

Specific to private deposit insurance in Washington State,Fortney continued, “Private insurance for credit unions is a stateissue determined and approved by state legislatures. NASCUSbelieves in the rights and authorities of state legislatures tomake decisions based on state law.” However, she acknowledged thatanyone wishing to comment during the public rulemaking process cando so.