I wonder how many depositors really care who insures their deposits or whether their deposits are insured at all.
While reading the May 23rd issue of the Credit Union Times, a headline caught my eye. It was titled “Rift Between Federal and Private Deposit Insurance Emerges in Washington State”. First, it’s rare that the Evergreen State is mentioned in the CU Times and second, the article seemed controversial…and I love a good controversy.
The gist of the story is that a number of Washington based credit unions are interested in having another option for deposit insurance besides the NCUA. American Share Insurance (ASI) is interested in providing such insurance, but is getting some pushback from the NCUA. Local bankers’ groups have also taken the position that this may not be the best of ideas.
Here are my thoughts…and I’ll preface this by stating that I’m not too educated on the details of this issue:
- I wonder if the NCUA’s concerns are founded mostly because they are worried for the stability of the credit union system or because they stand to lose business.
- It seems that when bankers take a position regarding a credit union issue, it’s generally a position that hurts, not strengthens credit unions. This makes me wonder if the idea of an alternative to the NCUA for deposit insurance is a good idea simply based on that.
- I wonder how many depositors really care who insures their deposits or whether their deposits are insured at all. The vast majority of my personal wealth is in non-insured financial instruments, and I’m ok with that.
I’m curious to know what others think about this…especially observation #3. If you want to give me some education, I’ll take that too!
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