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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