WASHINGTON –More than a trickle, less than an onslaught.
That's how credit unions and regulatory agencies are describing the level of public inquiries about deposit insurance.
Credit unions ranging from the 7,600-member Kentucky Employees Credit Union to the 3 million-member Navy Federal Credit Union are reporting an increase an inquiries on deposit insurance.
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"We're getting enough phone calls and in-person inquiries that we are putting information in our upcoming newsletter," said John Graham, president/CEO of Kentucky Employees. "We've also added information in our Web site."
Graham said there was "a relative calm" in the tone of the members' questions and, once the employee explained the coverage, "the member moves on to talking about their grandchildren."
Navy Federal has received more inquiries about deposit insurance than usual but "not a whole lot," according to its spokeswoman Jennifer Sadler. She said there has been an increase in calls from people hurt by the economic slowdown who want to straighten out their finances.
To respond to questions about deposit insurance, Navy Federal put a letter from its President/CEO Cutler Dawson on its Web site (www.navyfcu.org) and is enclosing an information sheet on deposit insurance with its next newsletter, containing information from NCUA and NAFCU.
"Given our financial strength and strong capital position, and because Navy Federal is backed by the full faith and credit of the U.S. Government, you can be sure that your funds are safe at your credit union," Dawson wrote on the Web site.
These public education efforts are in addition to the federal requirements.
NCUA requires all federally insured credit unions to display an official agency sign at each station or window where insured account funds or deposits are received. They must also display the sign on their Web site and in all advertisements.
The regulations do not specify how large the signs must be except they have to be "legible."
While members were approaching credit unions, a random survey of pedestrians in Washington revealed a lack of strong concern. Most people didn't want to talk about it. One of the few who did, a man who declined to give his name said, "I know that I'm covered, but I don't know the details."
The increased inquiries from credit union members prompted NCUA, CUNA and NAFCU to ramp up their outreach.
NCUA issued a statement that all deposits are insured up to $100,000, with coverage of up to $250,000 for some retirement accounts. Also, it noted that the NCUSIF's equity ratio is estimated at 1.24% as of June 30.
CUNA President/CEO Dan Mica wrote a letter to all 535 members of Congress in which he highlighted the strength of the insurance fund. He also noted
that because credit unions are more heavily regulated than other financial institutions, they have not made some of the same risky loans and investments as others have.
Mica's letter was accompanied by a fact sheet on credit unions. CUNA posted that on its Web site (www.cuna.org) for its members to distribute.
NAFCU sponsored a free Webinar on Friday that as of press time had attracted 700 registrants.
The association has a brochure explaining the deposit insurance system that it sells to its members so they can distribute it to their members. More brochures have been sold in the last month than in all of 2007.
"It's the No. 1 subject of the inquiries our compliance department is getting these days, that's why we decided to offer the seminar," NAFCU President/CEO Fred Becker said in an interview. "We've gotten no inquiries from Capitol Hill about safety and soundness. That's a very good thing."
First Capital Federal Touts Its Excess Share Insurance
WASHINGTON — In light of the financial crisis facing parts of the country, a credit union in York, Pa. is reminding its members that it provides insurance for deposits that exceed the $100,000 cap of NCUSIF.
First Capital Federal Credit Union is one of 13 credit unions in the state, and the only one in York County, that offers Excess Share Insurance. This means that the credit union offers up to $250,000 worth of additional insurance for those accounts over $100,000.
"Truly, it pays to belong to First Capital, if for no other reason peace of mind," said First Capital President/CEO Dennis Flickinger.
The credit union has been promoting the insurance, which it has offered since February 1997, in light of pictures of depositors at California's IndyMac Federal Bank expressing concern that their deposits over $100,000 are not covered by the FDIC.
First Capital Federal CU has 19,000 members and $93.5 million in assets.
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