HOW
SAFE IS MY CREDIT UNION AND MY MONEY?
As
you are likely aware, the numerous shocks that have occurred to
the U. S. financial markets since August 2007 have been unprecedented.
Our economy has certainly not seen this amount of turmoil in many
years and it is quite understandable that you would have concerns
about your financial institution, your life’s savings, and
your retirement plan.
Your
account at Union Yes FCU is insured by the National Credit Union
Administration, an agency of the United States Government. Each
member is insured up to $250,000. Individual Retirement Accounts
(IRA) accounts are insured separately for an additional $250,000.
During the long history of government-protected deposit insurance
coverage no member has ever lost any of their insured savings
held on deposit at a federally insured credit union.
When
you deposit money into the credit union we do one of two things
with your funds:
First,
we make loans to other members of the credit union. We do not
have any sub-prime mortgages and we have no connection to Fannie
Mae, Freddie Mac, or the Wall Street investment banks. Your deposits
are loaned out to people like you in a very conservative and prudent
manner. Our delinquent loans and the amount of charged off loans
have always been much lower than other credit unions. In fact,
both of these loan quality measurements have remained very low
even throughout the turbulence of the last year. We do not have
any foreclosed real estate property and the real estate loans
that have been made by the credit union are to members that we
know and trust will fulfill their borrowing commitment.
Secondly,
any funds that are not loaned out to members are used to purchase
insured certificates of deposits at financial institutions across
the country. All of our investments are below the $100,000 deposit
insurance maximum providing full government protection from the
risk of loss.
As
a result, 66% of your deposits are loaned out to other members,
28% of your deposits are held in insured investments, and the
remaining 6% of your deposits are tied up in non-earning assets
such as building and equipment.
Federal
regulations also require that we set aside capital, often called
“net worth” to provide additional protection to the
U. S. financial system. The highest rated credit unions are considered
“well-capitalized” when they have at least 7% of assets
held in their net worth account. We are proud to report that as
of June 30, 2008 our net worth ratio was 8.10%, which is a strong
indicator of our safety and soundness. Federal regulations also
require routine inspections of our financial records by government
examiners and by our independent CPA audit firm.
Let
me assure you that we have always operated is a safe and sound
manner and will continue to do so long after this temporary economic
crisis has passed.
For
the Board of Directors,
Nick
Monios, Chairman
William
W. Byerly, Jr., President/CEO
