Posts Tagged 'NCUA'

NCUA illustrates credit card difference

The National Credit Union Administration’s new site, MyCreditUnion.gov, is a great place to learn more about credit unions – what defines them, how they’re different from other financial institutions (like banks, or savings and loans), how they’re better, etc.

One of the most illustrative points is their section on credit cards. The NCUA shows what a difference a few percentage points on your credit card rate can make on your payments and total payoff amount.

For instance, the time it takes to pay off a credit card with a $5,000 balance at 18% APR is more than 39 years. At 10.9% APR, the time to payoff is only 19 years.

This comes right along with our new credit card comparison booklet, where you’ll notice that a lot of bank and store credit card rates have been hiked to 18% or more. The store cards are especially high – usually in the 20% range.

The NCUA site also mentions credit card pitfalls to avoid, like balance transfer fees (we don’t have those) and annual fees (we don’t have those either).

Credit card phishing alert

Alarming news from the NCUA:

The purpose of this fraud alert is to inform all federally-insured credit unions about a recent phishing attempt to obtain member credit card account numbers, expiration dates and electronic signatures. In cases reported to NCUA, the perpetrator(s) sent fraudulent e-mails, representing to be from the NCUA, to credit union members and the general public. The emails state the NCUA will add $50.00 to the member’s account for taking part in a survey. The link embedded in the message directs members to a counterfeit version of NCUA’s website with an illicit survey that solicits credit card account numbers and confidential personal information.

We are highly concerned about the risk of imitating the NCUA website and the use of the NCUA official logo to potentially make the scam appear more authentic to unsuspecting members. NCUA will never ask credit union members or the general public for personal account or personally identifiable information as part of a survey. Any e-mail that alleges to be from NCUA and asks for account information is fraudulent and should be treated as suspicious.

The NCUA recommends keeping up to date on virus protection software and security updates. Also, if you receive a scam e-mail, send it to Phishing@ncua.gov.

And by all means, do not give our your account information to just anyone that asks.

UPDATE: We just got another report of credit card phishing activity. This time, the caller claims to be with Visa or MasterCard, already has your credit card number, and asks for the three-digit number on the back of the card.

Whatever you do, don’t give them any more information than they already have.

“The member should be advised to note the telephone number of the caller and follow up with Visa or MasterCard by calling the 800 number on the back of the card to report the incident,” Jay A. Slagel, VP or Risk Management for Allied Solutions, advises. “The member should also contact their credit union to advise of the call and what specific requests were made.”

Credit union bailout? Not so fast.

Two recent articles – one at the Washington Post and another at the Wall Street Journal – leave the impression that credit unions are receiving a bailout from the government, like banks and insurance companies.

But things aren’t always as they seem, and credit unions are not receiving a bailout. In fact, credit unions are doing much better than banks.

The two stories focus on an institution that services credit unions, U.S. Central Corporate Federal Credit Union, an institution that handles financing and transactions for a big group of credit unions. U.S. Central doesn’t service members, like you or your neighbor. It services other credit unions. Think of it as a credit union for credit unions.

But the way the Wall Street Journal and the Washington Post make it sound (with headlines like “U.S. Aid Goes to Credit Unions”), the entire CU industry is in need of a handout. And that’s just not true.

What happened was U.S. Central took a group of credit unions’ money and invested it those mortgage-backed securities we keep hearing about. When those investments went sour, U.S. Central asked for a $1 billion loan (not bailout) from the National Credit Union Administration (NCUA) – the same government agency that insures your deposits at American 1. This isn’t Congress handing money to a financial institution that made bad decisions – as has happened a lot since September. Instead, it’s credit unions stepping in and helping out one of their own institutions.

Does this affect you or your membership at American 1? Not at all. American 1 is doing well financially. In fact, we trust our deposits with the Federal Reserve because of its reliability.

While newspapers seek to build up interest in stories by writing provacative headlines, the WSJ and Post went a bit too far with their misleading headlines.


Credit unions: safe, sound, with federal insurance



Can’t say it any smipler than that. From CUNA’s “Mica Minute.”


NCUA increases Federal Insurance Protection for your account



Good news – credit unions were included in Economic Stabilization Act (H.R. 1424), which increases the insurance coverage for your deposited funds, from $100,000 to $250,000, until December 2009.

This means all the money you have at American 1 is covered up to $250,000 should something happen. With the recent bank failures, the idea is to put everyone’s fears at rest.

As the National Credit Union Administration (NCUA) puts it, members of federally-insured credit unions have never lost a penny of their money.

The new $250k cap is true for FDIC-insured banks, too.

If you have any questions about this stuff, be sure to ask someone at our branch offices.


Best way to bank? Don’t take our word for it.



We like to point out that, even in times of financial stress, credit unions like American 1 are a steady way to do your banking. Financially, we’re in great shape, and we continue to do all the great things we’ve always done – like this weekend’s Women’s Expo.

But don’t take our word for it.

Productivity blog Lifehacker helps sing the praises of credit unions, offering us not-for-profit financial institutions as a barrier to the weirdness out there.

“With major instability in banking and unprecedented failures and buy-outs, it may feel like the only safe place to put your money is under your pillow,” Lifehacker editor Gina Trapani writes. “While even through buy-outs like Washington Mutual’s, your money remains FDIC-insured, this is a good time to consider an alternative to for-profit private banks—like credit unions.”

Thanks Gina! And be sure to check out the comments section of the Lifehacker article for great comments from credit union members.


Financial crisis reading material

Last night the Senate approved the “bailout plan,” and it waits for a vote from the House tomorrow (Friday).

In the meantime, here are some articles on the hoopla surrounding the financial crisis. An informed investor is a smarter investor – and even if you don’t do much investing, this stuff is good to know.

  1. As Credit Crisis Spiraled, Alarm Led to Action: from the New York Times, a great timeline of everything that led up to the current situation.
  2. Washington Post Q&A: Readers ask questions about the situation.
  3. Topical Depression: Bernanke Knows What We Have to Fear: Richard Cohen explores how this crisis compares with the Great Depression.
  4. The Only Thing We Have to Fear Is Fear Itself: from Trent over at The Simple Dollar, telling us all to relax.

How ‘big’ is the $700 billion bailout?



Got this e-mail from a co-worker this morning:

A fact, because it’s not a fun fact, I’ll just call it a fact. This morning on the radio I heard that the $700B bale out put in physical terms, would equal approximately 5.5 Empire State Buildings tall of $100 bill bricks ($100,000 in a brick of 2.5” tall bills).

What’s sad is that all those dollar bill bricks are held together by citizens’ repossessed homes, lost businesses, and bankruptcies.

While Washington tries to figure out what the heck to do, we’ll risk repeating ourselves: we’re doing fine.

During his address last night, President Bush said that small-town banks risk failure, but we’re not in any danger. We had an incredible year last year (8,000 new members in fact), and this year we’re growing almost as much. Our July loan rebate will give back thousands of dollars to our members, and our car sale last weekend kept $1 million in the community.

Credit unions are a safe, smooth-sailing way to do your banking. We weather these turbulent times thanks to the strength of our members and our service-minded philosophy. Plus, we’re backed by the full faith and credit of the United States government thanks to the National Credit Union Administration (NCUA), which insures deposits up to $100,000. Think of the NCUA, much like the FDIC for banks, as a strong umbrella in the storm.

American 1 takes our members’ money seriously. We don‘t gamble with sub-prime mortgages, we invest responsibly, and we give back to our community thanks to the support of you and your friends and family.

So for now, we’ll ride this thing out and see what happens at the other end. But this is no time to panic, no matter how many dollar bill bricks it takes to fix the mess.


How are credit unions doing? Hunky dory, thanks.

Someone wrote into the Washington Post:

Q. What is the impact of the government’s financial rescue plan on credit unions?


A. The impact on credit unions seems quite minimal. These nonprofit cooperatives do not hold many of the investments that are poisoning other financial institutions, so they have weathered the crisis fairly well. Credit unions have kept about 70 percent of their mortgage loans on the books, meaning that they did not sell them off to other institutions, according to the Credit Union National Association. The group said that less than 1 percent of credit union mortgages were in delinquency at the end of the first quarter. Delinquencies on other loans have edged up to 1 percent. “If they’ve got their money in a federally insured credit union, they’re just hunky dory,” CUNA spokesman Patrick Keefe said.

Hear that? Hunky dory!


WaMu sinks, customers still swim: so would you

Over at the Ask Metafilter, someone wondered if they should pull their money out of Washington Mutual Bank (often called “WaMu”) – you know, to be on the safe side.

The overwhelming answer? No.

Just like we mentioned a few weeks ago, when you put your money into a federally-insured financial institution, your deposits are covered up to $100,000. It’s the same for WaMu (they’re covered by FDIC insurance) as it is for American 1 (we’re covered by the NCUA).

Lots of weird stuff happening with Merrill Lynch and AIG, but fear not for American 1: we’re doing really well, and we don’t plan on going anywhere.


UPDATE: yesterday Rep. Maxine Waters, D-Calif., told NAFCU’s Congressional Caucus that credit unions are “the only sector of the financial industry that is not in dire straits right now,” thanks to CUs steering clear of sub-prime mortgages. “I know you’ll be part of the solution,” she told the credit union officials.


American 1 Federal Credit Union