HARRISBURG, Pa. — With the current state of the economy, some credit unions have noted an increase in concern from members about the safety and security of their accounts.
The Pennsylvania Credit Union Association urged credit unions in a newsletter to take every opportunity to inform members that their share and savings accounts are insured by the National Credit Union Share Insurance Fund.
"At times of financial uncertainty people have more of a focus on putting money where it's safe and secure and in federally insured financial institutions," said NCUA Director of Public and Congressional Affairs John McKechnie.
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McKechnie went on to say that in general people just feel more uncertain about the times, which makes credit unions more attractive.
President of Pennsylvania State Employees Credit Union Gregory Smith started reassuring members in August when the subprime mortgage crisis was at the forefront of the news. Through e-mail Smith was able to send a message to approximately 200,000 of PSECUs 340,000 members reassuring them that PSECU has never made subprime loans.
"We get about 10,000 phone calls a day and the call center lets me know if something's happening, and we're getting a lot of the same types of questions," Smith said.
Smith sent out another e-mailed message to members the same week as the collapse of Bear Stearns. This time Smith was alerted to the need to reassure members through a system the credit union has on its intranet.
The PSECU intranet has a tool called "Ask Greg" that allows employees to anonymously submit questions to the president.
"We get a lot of good ideas from it, and I got a comment from a staff member in our call center saying they were getting all these calls with questions," Smith said. "So I thought it's probably time to write something to our members."
In the e-mail Smith addressed three issues: That PSECU has never made subprime loans, PSECUs investments are limited by state and federal credit union laws and regulations, and that PSECU is one of the strongest financial institutions in the state for its asset size. The e-mail also reminded members that even though PSECU remains in a very strong position, if a significant problem should ever arise PSECU is federally insured by the NCUSIF.
"We got an overwhelming positive response," Smith said. "We even got a quite a few responses from members saying 'I wasn't worried.'"
To the responses that sparked even more questions Smith send out another e-mail message to members again responding to some specific questions that were raised, such as "If PSECU is in such a positive position, why didn't the credit union issue a special dividend last year?"Wings Financial Credit Union also recently reassured its members that the credit union is safe and secure through a post on its Web site. Wings had noticed many members were raising the question as to the credit union's ownership of distressed assets and decided to respond.
In the posting, Wings stated that the credit union never entered into the underwriting of subprime mortgages and that its investment portfolio has virtually no exposure risk to those types of investments. Wings also assured members that the credit union is safe and secure.
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