Private Insurer ASI Adds $647 Million Silver State Schools CU to Fund; ASI's Second Largest CU Client Behind Patelco

LAS VEGAS – Nevada’s largest state chartered credit union converted from federal insurance to private insurance, becoming American Share Insurance’s second largest client. Silver State Schools Credit Union, with $647 million in assets, is the third credit union to join American Share Insurance this year. ASI President and CEO Dennis Adams emphasized that his company performs on-site examinations at its seven largest credit unions twice a year, which would include Silver State Schools. The other two credit unions to join ASI this year were DuPage Credit Union (Illinois) and Landmark Credit Union (Alabama). ASI offers $250,000 worth of coverage per account as opposed to the National Credit Union Share Insurance Fund’s $100,000 per accountholder. Silver State Schools CEO Dave Rhamy explained, “The thing that led up to it was, we had [ASI's] excess insurance through their subsidiary ESI (Excess Share Insurance), and we topped out.” The credit union looked at restricting membership or what types of accounts would eligible for excess insurance, but there did not seem to be a good way out, he said. Actually, the credit union had been looking at the private insurance option since it converted to a state charter five years ago, Rhamy, who has been with Silver State Schools since 1999, said. Following this initial conversion, he said, NCUA really did not change its ways in terms of examination. “It appeared to me that they didn’t take any different approach than when they were the primary regulators,” Rhamy said. However, he emphasized, this was not the primary factor in the decision to convert to ASI. Rhamy added the conversion process “went very well. It went exceptionally well. It was far better than I imagined.” He said he was initially concerned about getting 20% of the membership out to vote since only 10-12% voted in their board elections. However, with ASI’s help, 37% of the membership voted on the decision with about 63% in favor of the switch, Rhamy said. He noted that there were no problems with NCUA during the conversion process and the federal regulator even made calls to the credit union to make sure they were doing everything correctly. The credit union is still waiting on its $5 million refund check from NCUSIF though, Rhamy pointed out. The controversy regarding private insurance among credit unions flared up a couple of years ago when the then just under $3 billion Patelco Credit Union (California), headed by former NCUA Chairman Ed Callahan, was-and remains-the largest credit union to convert to private insurance through ASI. NAFCU has placed itself squarely against private primary deposit insurance, while CUNA and NASCUS are in favor of maintaining the option. – [email protected]