Recent news of bank failures has caused alarm among many financial institutions and customers. But what about credit unions? How do they fare in times of economic uncertainty? Rest assured that the safety measures in place make credit unions a reliable option for consumers who want assurance their money is secure. Let’s take a look at why credit unions aren’t significantly impacted by recent bank failures.
What Separates Credit Unions from Banks?
At its core, a credit union is an organization owned by its members as opposed to shareholders. This means that profits made by the institution are returned directly to the members through better rates and services. This is different from banks, which are typically owned by shareholders and may use profits to benefit investors rather than customers. Credit union membership also requires a common bond between all members, such as employers, churches, or even location-based associations like neighborhoods or school districts.
Additionally, because credit unions operate as cooperatives rather than businesses, they do not have access to capital markets which makes them immune from the fluctuating interest rates and stocks that can cause banks to fail.
Stronger Regulatory Oversight for Credit Unions
Credit unions face stricter regulations than banks when it comes to safety and soundness standards designed to protect consumers' deposits and investments. Because each state has individual banking laws that must be followed, state regulators carefully monitor credit union activities, including asset quality and capital adequacy levels—two factors that have been linked to recent bank failures. In addition, all federally insured credit unions must meet periodic examinations conducted by the National Credit Union Administration (NCUA). The NCUA ensures that federal regulations are being followed while also providing additional oversight to protect members' funds.
As an NCUA-backed institution, the Share Insurance Fund provides up to $250,000 of deposit insurance per individual account holder. Let us give you the assurance and security that comes from trusting a partner dedicated to keeping your hard-earned money safe.
The Advantages of Working with a Credit Union
As a not-for-profit, Priority Trust is driven by looking out for our members and their financial well-being. And with local employees dedicated to helping neighboring communities succeed, we provide services that are tailored specifically to benefit you – not any remote investors! When your community thrives, so do we - it all starts here at home.
Priority Trust is also an exceptionally well-capitalized institution, boasting a financial stability that surpasses all regulatory benchmarks.
The bottom line is that credit unions have implemented strong safety measures designed to protect their members' deposits during difficult economic times. In addition, many offer services not found at traditional banks along with competitive rates on both checking and savings accounts—making them an attractive option for consumers looking for financial stability during tumultuous times like those we currently find ourselves in today. So don’t fear; your hard-earned money is safe at Priority Trust!