Why NWCU and Other Credit Unions Aren’t Impacted by Recent Bank Failures (2024)

One of the biggest reasons credit unions are able to avoid the conditions that forced the recent closures of Silicon Valley Bank and Signature Bank—is that a credit union is more than just a name; it’s a way of operating that protects members.

For starters, credit unions have protection from major market changes thanks to a mix of deposits and, perhaps more importantly, no investor capital. NWCU and other credit unions are owned and operated by the membership.

Silicon Valley Bank (SVB) and Signature Bank (SB) had hefty investments in tech, startups, and crypto industries. This means their overall success was hedged on the advancements of those industries. Because of this, when the value of cryptocurrency dropped, so did the monetary reserves of their investors; in this case, investors SVB and SB.

In comparison, we at NWCU and a majority of other credit unions don’t have crypto deposits, nor are we invested in one single type of market. And NWCU isn’t a bank; it’s a credit union! And to be clear, NWCU has zero affiliation with any of the recently closed banks, including, but not limited to, SVB or SB.

That said, it makes sense that many of our members would have questions about the safety of their money. Let’s get a few things out of the way.

Is My Money Safe?

Your money is safe here. That’s thanks in part to the National Credit Union Share Insurance Fund. The National Credit Union Administration (NCUA) is a government-mandated program that insures your money up to $250,000 per individual depositor. You can get more info on our NCUA brochure.

Accounts not separately insured. Northwest Division accounts are insured by the NCUSIF as accounts of TwinStar Credit Union.

But What If an Account Exceeds $250,000?

If your accounts have more than $250,000, then we’ll put you in contact with a service specialist to review available strategies. This includes investment accounts. Rest easy. We’ve got your back.

How Long Would It Take for NCUA Deposit Insurance to Kick In?

Historically, NCUA insurance payments happen within just a few days of any institutional loss.

The Strength and Stability of NWCU and Our Members.

One of the biggest financial safety factors for members of NWCU is that we’re local. Our employees and our members live and work in the same or neighboring communities. That means if our communities are thriving, then we’re thriving. And as such, all of our products and services are designed to be in your best interest rather than designed to benefit investors. We’re a not-for-profit organization, which means the only thing that matters to us is you.

The Takeaway

The takeaway is this: Your money is safe with us. We exist to serve our members and our communities, and all of our organizational changes are not only transparently communicated but also voted on by our members. If members don’t approve of an action, then we don’t take it. Big Banks can’t say the same.

As always, it is our honor to be there for our communities, and we look forward to a long, bright future doing just that.

Why NWCU and Other Credit Unions Aren’t Impacted by Recent Bank Failures (2024)


Why NWCU and Other Credit Unions Aren’t Impacted by Recent Bank Failures? ›

For starters, credit unions have protection from major market changes thanks to a mix of deposits and, perhaps more importantly, no investor capital. NWCU and other credit unions are owned and operated by the membership.

Is a credit union safer than a bank right now? ›

Generally, credit unions are viewed as safer than banks, although deposits at both types of financial institutions are usually insured at the same dollar amounts. The FDIC insures deposits at most banks, and the NCUA insures deposits at most credit unions.

Will credit unions fail if banks fail? ›

No. Credit unions are insured by the National Credit Union Administration (NCUA). Just like the FDIC insures up to $250,000 for individuals' accounts of a bank, the NCUA insures up to $250,000 for individuals' accounts of a credit union. Beyond that amount, the bank or credit union takes an uninsured risk.

Are credit unions safe from economic collapse? ›

Stocks, mutual funds and other investments aren't guaranteed in a recession. But money held in a federal credit union, and most state-chartered credit unions, is protected. Credit unions are regulated by the National Credit Union Administration (NCUA), the federal insurer of credit unions.

Is Navy Federal Credit Union safe from collapse? ›

The insurance protects Members against loss if a federal credit union fails. Individual accounts are insured for up to $250,000 for combined balances in your savings, checking, share certificates, and MMSAs. Joint accounts are insured for up to $250,000 for each joint owner on the account.

What happens to credit unions when banks collapse? ›

If your money is at a credit union, it is similarly protected by the NCUA, with the same limits. This can provide peace of mind, no matter what type of institution you prefer for your money.

Are credit unions safe if banks crash? ›

The NCUA insures depositors' funds up to the same threshold as the FDIC, $250,000. Just like banks, deposits above the $250,000 mark at credit unions are uninsured, But unlike banks, credit unions do not have the same level of risk exposure to the factors that took down SVB and other troubled lenders.

Which is safer, FDIC or NCUA? ›

One of the only differences between NCUA and FDIC coverage is that the FDIC will also insure cashier's checks and money orders. Otherwise, banks and credit unions are equally protected, and your deposit accounts are safe with either option.

Should I be worried about credit unions? ›

Credit unions are generally safe.

How safe is my money in a credit union? ›

Which is Safer, a Bank or a Credit Union? As long as you are banking at a federally insured institution, whether it is a credit union insured by the NCUA or a bank by the FDIC, your money is equally safe. Credit unions are owned by the members—your savings account at a credit union is a share of ownership.

Are any credit unions in financial trouble? ›

National Credit Union Administration (NCUA) credit unions had seven conservatorships/liquidations in 2022 and two so far in 2023. While credit unions have experienced several failures in 2022, there were no Federal Deposit Insurance Corp.

Why do banks not like credit unions? ›

First, bankers believe it is unfair that credit unions are exempt from federal taxation while the taxes that banks pay represent a significant fraction of their earnings—33 percent last year. Second, bankers believe that credit unions have been allowed to expand far beyond their original purpose.

Is my money safe with Navy Federal Credit Union? ›

Strong, Safe and Secure

The National Credit Union Administration (NCUA), a U.S. Government Agency, insures members' savings up to $250,000 and IRA funds up to $250,000. We always adhere to sound financial underwriting practices. We're regularly audited by PricewaterhouseCoopers LLP, an independent auditing firm.

Is my money safe at nfcu? ›

Navy Federal's savings, checking, Share certificates and Money Market Savings Accounts (MMSAs) are insured for up to $250,000. Individual accounts are owned by one member.

Are credit unions safer from collapse than banks? ›

Why are credit unions safer than banks? Like banks, which are federally insured by the FDIC, credit unions are insured by the NCUA, making them just as safe as banks. The National Credit Union Administration is a US government agency that regulates and supervises credit unions.

What is the downside of banking with a credit union? ›

Limited accessibility. Credit unions tend to have fewer branches than traditional banks. A credit union may not be close to where you live or work, which could be a problem unless your credit union is part of a shared branch network and/or a large ATM network such as Allpoint or MoneyPass.

Should I put my money in a bank or credit union? ›

Credit unions tend to have lower interest rates for loans and lower fees. Banks often have more branches and ATMs nationwide. Many credit unions have shared branches and surcharge-free ATMs provided through the CO-OP Shared Branch network. Banks have historically had better technology online and for mobile apps.

Top Articles
Latest Posts
Article information

Author: Otha Schamberger

Last Updated:

Views: 6412

Rating: 4.4 / 5 (55 voted)

Reviews: 86% of readers found this page helpful

Author information

Name: Otha Schamberger

Birthday: 1999-08-15

Address: Suite 490 606 Hammes Ferry, Carterhaven, IL 62290

Phone: +8557035444877

Job: Forward IT Agent

Hobby: Fishing, Flying, Jewelry making, Digital arts, Sand art, Parkour, tabletop games

Introduction: My name is Otha Schamberger, I am a vast, good, healthy, cheerful, energetic, gorgeous, magnificent person who loves writing and wants to share my knowledge and understanding with you.