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League Monitors Fall-Out from Bank Failures; Working with NCUA and Others

Authored By: Lewis Wood on 3/13/2023

The failures of Silicon Valley Bank and Signature Bank of News York will continue to have future policy ramifications as the Federal Reserve, Treasury and the FDIC took swift action to instill consumer confidence in the banking system. These actions may prompt members to ask questions about account insurance at credit unions.   

The League notes:

  • Federally insured credit unions offer a safe place for credit union members to save money. These deposits are protected by the National Credit Union Share Insurance Fund and insured up to at least $250,000 per individual depositor – the same as any other federally insured financial institution.
  • Credit union members have never lost a penny of insured savings at a Virginia-based credit union ... or at any other credit union.
  • Visit MyCreditUnion.gov for more information about the National Credit Union Share Insurance Fund coverage for consumers. This site features a share insurance toolkit that will prove useful.

 "Your League will continue to engage with our regulators regarding this ongoing situation," said League President/CEO Carrie Hunt. "We will keep our our you up-to-date with any developments as they occur." 

The National Credit Union Administration noted in a statement today that the credit union system remains well-capitalized and on a solid footing. The agency continues to coordinate with the other federal financial institution regulators to ensure the continued resiliency of the American financial services system.

  • League President/CEO Carrie Hunt penned an editorial that’s been distributed across the Commonwealth. In it, she notes that credit unions remain a safe, sound and federally insured haven for Virginians seeking a financial services partner that puts them first.
  • During our quarterly Compliance Webinar today, we covered some of the tools available to credit unions in the unlikely event recent market shocks impact liquidity at Virginia-based credit unions, including the Federal Reserve’s Bank Term Funding Program.
  • In communication to members and during our recent Compliance Webinar, we noted that the League is closely monitoring discussions by policymakers related to regulation in the aftermath of SVB/Signature Bank. We urge policymakers to consider a targeted, tailored approach to addressing any regulatory issues brought to light in reviewing these bank failures. Credit unions and our members should not suffer for the failings of a few institutions or those institutions’ regulators.
  • We remain engaged with our Congressional delegation on this issue, reminding lawmakers that these bank failures involved institutions that operated under a very different business model from the tried-and-true, consumer-focused “savings and loans” model that defines member-owned, not-for-profit credit unions. That fact demands lawmakers’ careful consideration in any discussions and investigations they pursue in reviewing these bank failures.
  • We remain in contact with leaders at the National Credit Union Administration (NCUA), related to tools for credit unions to manage the fallout from the bank failures, as well as the challenging rate environment and potential liquidity issues. League President/CEO Carrie Hunt attended the NCUA Board's March 16 meeting, which featured statements from all three board members related to the safety and soundness of America's credit unions and the strength of the National Credit Union Share Insurance Fund.

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