One of the biggest reasons credit unions are able to avoid the conditions that forced the recent closures of Silicon Valley Bank and Signature Bank—is that a credit union is more than just a name; it’s a way of operating that protects members.
For starters, credit unions have protection from major market changes thanks to a mix of deposits and, perhaps more importantly, no investor capital. NWCU and other credit unions are owned and operated by the membership.
Silicon Valley Bank (SVB) and Signature Bank (SB) had hefty investments in tech, startups, and crypto industries. This means their overall success was hedged on the advancements of those industries. Because of this, when the value of cryptocurrency dropped, so did the monetary reserves of their investors; in this case, investors SVB and SB.
In comparison, we at NWCU and a majority of other credit unions don’t have crypto deposits, nor are we invested in one single type of market. And NWCU isn’t a bank; it’s a credit union! And to be clear, NWCU has zero affiliation with any of the recently closed banks, including, but not limited to, SVB or SB.
That said, it makes sense that many of our members would have questions about the safety of their money. Let’s get a few things out of the way.
Is My Money Safe?
Your money is safe here. That’s thanks in part to the National Credit Union Share Insurance Fund. The National Credit Union Administration (NCUA) is a government-mandated program that insures your money up to $250,000 per individual depositor. You can get more info on our NCUA brochure.
But What If an Account Exceeds $250,000?
If your accounts have more than $250,000, then we’ll put you in contact with a service specialist to review available strategies. This includes investment accounts. Rest easy. We’ve got your back.
How Long Would It Take for NCUA Deposit Insurance to Kick In?
Historically, NCUA insurance payments happen within just a few days of any institutional loss.
The Strength and Stability of NWCU and Our Members.
One of the biggest financial safety factors for members of NWCU is that we’re local. Our employees and our members live and work in the same or neighboring communities. That means if our communities are thriving, then we’re thriving. And as such, all of our products and services are designed to be in your best interest rather than designed to benefit investors. We’re a not-for-profit organization, which means the only thing that matters to us is you.
The takeaway is this: Your money is safe with us. We exist to serve our members and our communities, and all of our organizational changes are not only transparently communicated but also voted on by our members. If members don’t approve of an action, then we don’t take it. Big Banks can’t say the same.
As always, it is our honor to be there for our communities, and we look forward to a long, bright future doing just that.