Dear Members:

We understand that with all of the recent upheaval in the financial industry, many of you are concerned about the health and safety of your credit union and, more importantly, your money.  We have provided some information below to hopefully make you feel more confident in your credit union.

Is My Money Safe?

Yes, it is insured by the National Credit Union Share Insurance Fund (NCUSIF).

Who is NCUSIF?

They are the NCUA (National Credit Union Administration).  This is similar to FDIC for banks.

Is the insurance unlimited?

No, there are caps on insured funds, identical to FDIC. NCUA recently increased the insured amount for all account types to $250,000. This increase is effective through December 31, 2009. There are ways to significantly increase coverage above $250,000 with proper account titling. Speak with a credit union representative for more information.

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How do I know the credit union is financially healthy?

Our Regulators (NCUA) determine that any credit union that has a “net worth ratio of 7% is considered ‘very well capitalized’”. Central One’s net worth ratio^† is well over 8%. 

^†Net worth ratio is capital divided by total assets.

What about all the media hype about potential bank failures?

The Credit Union does not engage in the risky investments that have created the negative headlines for other financial institutions. Generally, banks that purchased stock (common or preferred) in FannieMae or FreddieMac will be affected.  These banks could see a dramatic drop in their capital if the proposed “bailout” does not re-establish these now drastically reduced stock values. Credit Unions are nonprofit cooperatives and do not hold the investments that are poisoning other financial institutions. Central One, and credit unions in general, cannot, by regulation, and do not own any stock of any kind in FannieMae, Freddie Mac or any other company.

What should I do if I am concerned?

Don’t panic.  Talk to credit union staff about insurance coverage if you are concerned.

What about all of the foreclosures going on?

Central One has yet to foreclose on a single piece of property in this recent downturn of the economy. We have prudent underwriting practices and our loan decisions are made locally.

Is Central One a good, safe place for my money?

Due to regulatory restrictions on stock purchases and its outstanding performance in the area of real estate lending, Central One is an extremely safe place for anyone’s money.

How can I monitor the financial health of Central One?

The credit union posts its balance sheet in the branches and on the website (www.centralfcu.com) which also displays our net worth ratio.  This is the key indicator of financial health of any organization.  As previously stated, the Credit Union’s net worth ratio is currently well over 8%. (>7% = “very well capitalized”)

Additionally, the credit union displays its net income on a year to date basis.  The combination of high net worth ratio and positive annual earnings is assurance that your credit union is financially healthy.  You can monitor this each and every month.

If you have any other questions, please see credit union staff.

NCUA offers a Consumer Assistance Hotline to answer any questions: 800-755-1030, Mon. – Fri. 8:00 a.m. to 6:00 p.m.

Information is also available at their website:  www.ncua.gov

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