Credit Union’s and NCUA?

[cashflow]

Does anyone have their money in a credit union? Our credit union states that the money is insured to at least 100k by the National Credit Union Administration (NCUA)? This is not the FDIC…so I’m a bit concerned if the rules the FDIC set forth would apply to credit unions?
I tried to look at the NCUA website and couldn’t find the rules regarding insurance on individual/joint accounts. I did see lots of legalize regarding court action and a time limit of 180 days for determination of liquidation.

http://www.ncua.gov/RegulationsOpinionsLaws/fcu_act/fcu_act.pdf

So what is everyone’s opinion here, as I have seen some people post that they have money in Credit Unions. Since we have historical knowledge that the FDIC does pay up quickly in the event of a bank closure, I’m thinking it is ‘safer’ to bank with an FDIC insured institution.

[temeculaguy]

I wouldn’t give it another thought. The local bank and CU’s are not who is in trouble here, credit unions and mortgage lenders are different animals entirely and the last decade has seen the explosion of mortgage backed securities so your local bank or CU is not holding a lot of local home loans. Hedge funds, foriegn investors and mortgage banks have the short end of this stick. Your credit union probably has more car loans on their balance sheet than mortgages and for good reason, their mortgage rates suck and have always sucked.

We are nowhere near mattress time, CU’s are conservative for the most part, so sleep well. If the CU’s and main street banks were to all fail then it wouldn’t really matter if you got your money back because it would be worthless anyway. A little perspective here, many components of the economy will have some short term pain but the real pain is in the non traditional mortgages originated in the last four years. When real estate falls to affordable levels the pain for the rest of the economy will end, people will buy again, commisions will be made, carpeting sold again, home depot will be busy again. It’s just a cycle, not the end of the world. Break out your “It’s a wonderful life” DVD, in the end it all works out.

[temeculaguy]

I wouldn’t give it another thought. The local bank and CU’s are not who is in trouble here, credit unions and mortgage lenders are different animals entirely and the last decade has seen the explosion of mortgage backed securities so your local bank or CU is not holding a lot of local home loans. Hedge funds, foriegn investors and mortgage banks have the short end of this stick. Your credit union probably has more car loans on their balance sheet than mortgages and for good reason, their mortgage rates suck and have always sucked.

We are nowhere near mattress time, CU’s are conservative for the most part, so sleep well. If the CU’s and main street banks were to all fail then it wouldn’t really matter if you got your money back because it would be worthless anyway. A little perspective here, many components of the economy will have some short term pain but the real pain is in the non traditional mortgages originated in the last four years. When real estate falls to affordable levels the pain for the rest of the economy will end, people will buy again, commisions will be made, carpeting sold again, home depot will be busy again. It’s just a cycle, not the end of the world. Break out your “It’s a wonderful life” DVD, in the end it all works out.

[temeculaguy]

I wouldn’t give it another thought. The local bank and CU’s are not who is in trouble here, credit unions and mortgage lenders are different animals entirely and the last decade has seen the explosion of mortgage backed securities so your local bank or CU is not holding a lot of local home loans. Hedge funds, foriegn investors and mortgage banks have the short end of this stick. Your credit union probably has more car loans on their balance sheet than mortgages and for good reason, their mortgage rates suck and have always sucked.

We are nowhere near mattress time, CU’s are conservative for the most part, so sleep well. If the CU’s and main street banks were to all fail then it wouldn’t really matter if you got your money back because it would be worthless anyway. A little perspective here, many components of the economy will have some short term pain but the real pain is in the non traditional mortgages originated in the last four years. When real estate falls to affordable levels the pain for the rest of the economy will end, people will buy again, commisions will be made, carpeting sold again, home depot will be busy again. It’s just a cycle, not the end of the world. Break out your “It’s a wonderful life” DVD, in the end it all works out.

[capeman]

I wouldn’t count on that hypothesis. I belong to NavyFed and they have a lot of 100% financings sold off and if the mortgages get called back to the bank there could be problems. The auto loans and others given to people with mortgage woes could be in trouble as well. Of the CUs that I know of not a lot are exposed but I would keep an eye out as to whether your’s is or not. Just look on the website and see what kind of mortgage financing they offer. If the requirement is less than 80% LTV then they are not likely at as high a risk as some other institutions.

[capeman]

I wouldn’t count on that hypothesis. I belong to NavyFed and they have a lot of 100% financings sold off and if the mortgages get called back to the bank there could be problems. The auto loans and others given to people with mortgage woes could be in trouble as well. Of the CUs that I know of not a lot are exposed but I would keep an eye out as to whether your’s is or not. Just look on the website and see what kind of mortgage financing they offer. If the requirement is less than 80% LTV then they are not likely at as high a risk as some other institutions.

[capeman]

I wouldn’t count on that hypothesis. I belong to NavyFed and they have a lot of 100% financings sold off and if the mortgages get called back to the bank there could be problems. The auto loans and others given to people with mortgage woes could be in trouble as well. Of the CUs that I know of not a lot are exposed but I would keep an eye out as to whether your’s is or not. Just look on the website and see what kind of mortgage financing they offer. If the requirement is less than 80% LTV then they are not likely at as high a risk as some other institutions.

[Raybyrnes]

Navy fed’s program offering greater than 100% are probably tied to VA loans in which case they are insured by the federal government. If someone defaults on this type of loan the bank gets paid back a high percentage on each dollar (I don’t have the speacific amount) Student Loans and SBA loan are comparable. Student loans are 98 cents on the dollar that lenders get paid back for defaults. SBA loans I am uncertain about. Probably 75 to 80 cents on the dollar.

[Raybyrnes]

Navy fed’s program offering greater than 100% are probably tied to VA loans in which case they are insured by the federal government. If someone defaults on this type of loan the bank gets paid back a high percentage on each dollar (I don’t have the speacific amount) Student Loans and SBA loan are comparable. Student loans are 98 cents on the dollar that lenders get paid back for defaults. SBA loans I am uncertain about. Probably 75 to 80 cents on the dollar.

[Raybyrnes]

Navy fed’s program offering greater than 100% are probably tied to VA loans in which case they are insured by the federal government. If someone defaults on this type of loan the bank gets paid back a high percentage on each dollar (I don’t have the speacific amount) Student Loans and SBA loan are comparable. Student loans are 98 cents on the dollar that lenders get paid back for defaults. SBA loans I am uncertain about. Probably 75 to 80 cents on the dollar.

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