Becker: Ensure Parity in Deposit Insurance Reform

WASHINGTON- NAFCU President and CEO Fred Becker wrote a letter to House Financial Institutions and Consumer Credit Subcommittee chairman prior to his subcommittee’s hearing on deposit insurance reform legislation supporting separate but equal treatment for credit unions. In his letter to Congressman Spencer Bachus (R-Ala.), Becker noted that the Federal Deposit Insurance Reform Act of 2005 (H.R. 1185) would maintain a separate insurance fund for credit unions, a key reason NAFCU was formed. “We believe that the differences between the NCUSIF and the BIF and SAIF funds warrant and justify a separate insurance fund for credit unions, and we do not support any efforts to consolidate the NCUSIF with the other insurance funds,” he wrote. He pointed to credit unions’ 1% deposit and 1.2% to 1.3% equity fund ratio range. “Like the credit unions whose accounts it insures, the NCUSIF is itself cooperative in nature,” Becker wrote. “Unlike BIF and SAIF, both of which were initially funded with taxpayer dollars from the United States Treasury as seed-money, every dollar that has gone into the NCUSIF since its inception has come solely from the credit unions it insures. Credit union members throughout the country are justifiably proud of the fact that the NCUSIF has never been a drain on the American taxpayer.” Becker also clarified that while the bill includes an insurance coverage increase to $130,000 per account for the Federal Deposit Insurance Corporation and the National Credit Union Share Insurance Fund, NAFCU is not seeking a general increase in the overall level of deposit insurance coverage; the trade association simply wants parity for the NCUSIF and the new fund created by merging the Bank and Savings Association Insurance Funds. H.R. 1185 would merge the Bank and Savings Association Insurance Funds, create a reserve ratio range for the FDIC, and provide for an insurance coverage increase to $130,000 per account, among other things. A copy of the letter was also sent to Financial Institutions and Consumer Credit Subcommittee Ranking Member Bernie Sanders (I-Vt.). [email protected]