According to this American Statesman article, members of Velocity Credit Union in Texas have voted in favor to switch Velocity's deposit insurance from NCUA to private insurance from American Share Insurance Corp. (ASI). When I had asked a Velocity CSR last week about the vote, I was told the results would not be known until the end of January. I guess the credit union decided to release the results early. According to the article, the results must still be officially tabulated and approved by the NCUA. The approval required 20% of Velocity members to have voted with a majority voting in favor.
As I mentioned in September, the NCUA requires that a credit union that is dropping federal insurance allow its members to make a penalty-free early withdrawal on certificates. For more info on ASI, refer to my ASI review post.
ASI in Negotiations to Wind Down Its Business?
This is something very interesting that I read at Keith Leggett's blog. According to the Credit Union Journal, ASI is in negotiations with the NCUA to wind down its business. If this goes through, I would guess all ASI-only credit unions would switch to NCUA insurance. So the Velocity vote may not mean much. As I've been reporting, there have been questions about ASI's stability as large ASI-only credit unions experience financial problems.
Update 1/07/10: According to this NAFCU article, the NCUA is denying that they were discussing an ASI wind-down.
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Comments (13)
Velocity CU Members Approve Conversion to Private Insurance - Future of ASI?
Wednesday, January 6, 2010 - 7:56 AM CT by Ken - Bank Deals Guy
View current rates for Velocity Credit Union
Tags: banking news, Velocity CU
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cdozo - #13, Wednesday, February 10, 2010 - 10:19 AM CT
I just recieved an e-mail fom Velocity Credit Union here in Austin, Texas. It said, in part:
Member deposits to remain insured by NCUA
"February 9, 2010
Dear Member,
As you know we recently asked for your support to consider converting the credit union's share (deposit) insurance provider from the National Credit Union Administration (NCUA), an agency of the federal government, to American Share Insurance (ASI), a credit union-owned private deposit insurer.
We are writing today to let you know that our Board of Directors has decided not to switch to ASI. We have informed both ASI and NCUA of our decision to remain with NCUA.
Your deposits are, and will remain, insured by the federal government."
There is more. You can read the whole e-mail at https://www.velocitycu.com/president_letter_asi.html.
I like the people I deal with at Velocity and I'm glad that the directors there have decided to stay with NCUA.
Thanks, Ken BDG, for keeping me up-to-date on what's happening with my credit union and where the good bank deals are.
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Anonymous - #1, Wednesday, January 6, 2010 - 10:07 AM CT
I wonder what was offered to sway the members to vote for the private insurance? A free taco?
I would have figured this never had a chance...
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Anonymous - #2, Wednesday, January 6, 2010 - 11:18 AM CT
When their membership and deposits dwindle down they will see the light. How to drive a credit union into the ground in one easy lesson.
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Anonymous - #3, Wednesday, January 6, 2010 - 11:23 AM CT
only foolish people will keep ther money there...
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Anonymous - #5, Wednesday, January 6, 2010 - 1:36 PM CT
Note that that blog is operated by the American Bankers Association.
Can't read the article that he is pointing to -- subscribers only.
Can a subscriber pick off that paragraph and post it here?
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