Patelco: Fed insurance program coverage improved
SAN FRANCISCO (9/28/07)--Improvements in the federal insurance program was cited by Patelco CU as one reason it recently applied for federal insurance under the National Credit Union Share Insurance Fund (NCUSIF).
The deposits of the $4.3 billion asset, San Francisco-based credit union had been insured by a private share insurer since November 2002. The National Credit Union Administration (NCUA) said Wednesday it had received the application.
Anita E. Macias, senior vice president of corporate planning and communications at Patelco CU, said the credit union is making the switch for several reasons.
"The NCUSIF coverage limit on Individual Retirement Accounts (IRAs) was only $100,000 until recently," she said, adding NCUSIF's recent increase to the $250,000 maximum of coverage "is a significant improvement in the federal program."
The cost borne by Patelco for deposit insurance through NCUSIF will be lower, she told News Now.
The credit union also found private share insurance to be more limiting in working with agencies and potential partners.
"Recently, we have found that our private insurance coverage has limited our ability to work with some federal agencies that are closely involved with mortgage handling," Macias said.
Also, "the private insurance has been a hindrance to our ability to increase our branch network through partnerships with other credit unions," Macias said.
Currently, Patelco CEO Andrew Hunter is a member of the board of directors of the Ohio-based American Share Insurance (ASI), the private insurance provider Patelco switched to in November 2002.
"Upon completion of the (insurance application) process, Andy intends to resign his ASI board seat," Macias said.
Patelco is the largest credit union to have private insurance. NCUA said the application will be reviewed initially at the regional level and a determination of insurability will be made based on requirements in NCUA Rules and Regulations (News Now Sept. 27).
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