According to an article published by the Austin American-Statesman, members of Velocity Credit Union, one of the largest credit unions in Central Texas, have voted to drop the company's federally backed deposit insurance in favor of coverage from a private company, ASI.
Approval of a conversion of federal to nonfederal insurance requires the affirmative vote of a majority of the credit union’s members who vote on the proposition, provided at least 20 percent of the total membership participates in the voting.
The vote is still awaiting certification by the National Credit Union Administration. If approved, Velocity CU will become the second Texas credit union to opt for private insurance.
If the conversion receives regulatory approval, NCUA rules state that "the credit union will, at any time before the effective date of conversion, permit all members who have share certificates or other term accounts to close the federally-insured portion of those accounts without an early withdrawal penalty."
In a related story, Credit Union Journal (paid subscription) is reporting that ASI is in negotiations with NCUA to wind down its business (see second paragraph).
If this true, then was the vote to convert to ASI an exercise in futility?
Yesterday, I referenced an article that appeared in Credit Union Journal that stated American Share Insurance (ASI) was in talks with NCUA to wind down its business.
ReplyDeleteASI president, Dennis Adams, denies that there are any negotiations between NCUA and ASI. Below is the statement that appears in today's Credit Union Journal from ASI (subscription required).
"No such statement or reporting has been made or rendered by ASI in any form and there are no such negotiations going on between ASI and the NCUA. ASI is financially sound, with fully funded reserves, and is anticipating a year-end equity ratio in excess of 1.30% of primary insured shares. Statements of this nature can undermine an otherwise healthy program, raising concerns where concerns don’t exist."
ASI are Liars.. They are the worst.. They are not a sound company, nor are the a "Solvent Company", however they go to other Credit Unions, pick them apart in this recession and they want them to be taken over by "Credit Union 1".. Their relationship with "Credit Union 1" should be investigated.. Something smells Illegal what they are doing to small CU's to force mergers with "Credit Union 1", is ASI getting kickbacks?, I definetly think so..
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