Las Vegas has become the industry hot spot this month for heated public dialogue about federal vs. private insurance with both NCUA Chairman Debbie Matz and American Share Insurance CEO Dennis Adams taking turns at media megaphones.The sudden private vs. public debate and safety and soundness messaging was triggered by media coverage of credit union and bank failures and the more recent focus on the troubles of the $883 million Silver State Schools Credit Union, the state's largest.Just last week, the $783 million Nevada Federal Credit Union, the state's second largest, posted a New Year's Web site message to members and potential members from its President/CEO Brad Beal titled, "Well-Capitalized, Safe and Secure" that included a reminder that Nevada FCU through NCUA insurance has the backing of "the full faith and credit of the U.S. Treasury."In a Q&A portion, one question asked "Which is better, private insurance or NCUA insurance?" Beal urges his audience "to decide which one makes you feel the most comfortable."The Beal message followed comments in the Las Vegas media by Silver State's President/CEO David Rhamy and ASI's Adams that disputed the content of a speech by Matz that they said demeaned or undermined private insurance.Specifically, Rhamy, who is seeking restore public confidence in Silver State, charged that Matz in remarks at an early December CUES conference in Palm Desert, Calif., was trying to "scare people" that ASI-insured credit unions were at risk. He told a Las Vegas newspaper that Matz's claims that ASI lacks the ability to pay depositors if a large CU fails were false. ASI also vigorously denied that contention.Although ASI move over the holidays to impose a 15 basis deposit premium on its 157 insured credit unions to cover ongoing and potential losses, Adams criticized the Matz CUES speech as ill-informed, telling a Las Vegas reporter, the NCUA chairman could not possibly know the ASI decision-making process "having never stepped inside" ASI's offices in Dublin, Ohio. Her comments that ASI would be unable to pay off a large failure were "a gross misstatement," Adams said, adding that ASI "is better managed than NCUA."In 35 years, ASI has had 35 credit unions fail and "not one depositor has lost a dime," Adams declared. The "no loss" pitch is frequently part of the marketing messaging in Nevada by ASI-insured credit unions in media ads and online.For its part, the NCUA responded to Rhamy's comments by saying that the agency "has one goal in mind: protecting consumer deposits in credit unions. There is no substitute for the strength and stability of NCUSIF insurance, which carries with it the backing of the full faith and credit of the federal government.""Chairman Matz believes that consumers need to be well-informed about deposit insurance, particularly in times like these," said John McKechnie, NCUA director of public and Congressional affairs. "That includes among other things, understanding what guarantees stand behind the insurance, how strong the respective insurance funds are and how payouts would occur in the case of the closure of an institution."While the ASI vs. NCUA rhetoric continued to play out last week, credit unions in the state were girding their shops for more bad economic news in 2010 as the Nevada slump showed few signs of easing with still high loan delinquencies rates and highest-in-the nation unemployment.Wayne Tew, president/CEO of another ASI-insured credit union, the $579 million Clark County Credit Union, warned his members in a year-end message that the Las Vegas credit union by the end of 2010 "will probably become a smaller, leaner credit union to maintain good net worth."He did not say how that would be achieved but lamented the loss of the yearly dividend, noting "our nine-year run of consistent bonus dividends will now take a time-out as we look forward to better times in the Nevada economy."Tew wrote that he wanted to be candid with members about the grim times in Nevada, noting that he and other Clark County staffers share members' economic pain."The reasons for us not having a bonus dividend are obvious to us, but may seem unclear to you, our members, who have come to rely on them," said Tew. "You are certainly aware of co-workers, friends and neighbors who have lost work and have had to lose homes or turn in cars.""Many of you also know of individuals utilizing the euphemistic concept of 'strategic defaults' on homes they purchased, or purchases made on home equity loans when home values were at their peak," added Tew.Striving to support its Nevada member base, the California/Nevada Credit Union League agreed in a statement that the recession has hit Nevada harder than any other state but that the "good news is that Nevada credit unions overall remain well-capitalized at 7.52% through the third quarter of 2009.""This capital base provides a strong foundation" for the state CUs to withstand the economic downturn "and provide opportunities for loan modifications, said the league. Nonetheless, the "depth and duration of the economic downturn have reached into nearly every industry and every home," continued the league statement. "Even members with solid credit histories who have lost their jobs or been furloughed are having difficulty making payments on loans."–[email protected]