WASHINGTON — CUNA and NAFCU have clashed over the issue of private insurance with NAFCU coming down squarely against the option from primary deposit insurance coverage.
NAFCU has found a supporter in Congressman Paul Kanjorski (D-Pa.) who is dead-set against it as well. "I think this most recent credit crunch is the perfect example of why we should be very careful with having any type of private insurance. In order to have federal insurance for deposits it almost requires uniform and unanimous participation," he said. Anything less is "tearing of the fabric of support for federal insurance."
Private firms can play with the numbers to look better, he said, like providing higher coverage levels, but, "The real question always comes down to how secure is the insurance company." These companies look good during the good times, but the true test is during the rough spots. Kanjorski pointed to the past failures in Rhode Island and elsewhere.
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