NCUA CONSERVATORSHIP OF U.S. CENTRAL AND WESCORP CORPORATE CREDIT UNIONS

You may have seen that the National Credit Union Administration has placed two corporate credit unions into conservatorship; U.S. Central Credit Union of Lenexa Kansas and Western Corporate Credit Union of San Dimas California. these are wholesale credit unions, not credit unions that serve consumers, and this action by the regulator will have NO impact on SSCU or any other credit union, nor our ability to serve you, our members.

Corporate credit unions do not serve consumers, but rather they provide liquidity, investments, and payment services to credit unions that do serve consumers. This conservatorship of these two corporate credit unions does not mean they have been closed, and in fact they will continue to operate normally and still offer their services to credit unions. 

Corporate credit unions are not immune to the difficulties of the current economic conditions. Like others invested in the market, corporate credit unions have seen the value of their investments decline. In the case of the these two, the potential losses were enough that the regulator made the decision to step in and place them into conservatorship. 

The deposits that credit unions keep at these and all corporate credit unions are fully insured by the federal government, just as your deposits with Social Security Credit Union are insured up to $250,000 per account.

What does this all mean for you, the member of Social Security Credit Union? It's business as usual. The same great level of quality service you have received from our credit union will continue. Our service to you is not impacted at all by this action of the regulatory agency.

In addition to your deposits being insured, SSCU is safe, sound and well managed. Our net worth id 23.58% which means a substantial percentage of our assets are set aside in reserves to protect you, the member. And as an industry, credit unions nationwide currently have a capital-to-assets ratio of more than 10%, which means that eh industry is well positioned to absorb the cost of this action by the regulator.

Credit unions have been serving members for 100 years, in good times and in bad. No credit union has ever cost the  U.S. taxpayers one cent to bail us out, and we will continue to operate safely, remaining strong, to serve you our members. 

                                                        Spring Newsletter 2009

America's Credit Unions: Secure, Strong
Amid turmoil, serving as safe harbors for consumer savings

Credit unions as a whole are healthy, with strong balance sheets.

*Credit unions are well capitalized. Their overall capital-to-asset ratio stands at a very solid 11.1% (compared to 10% for banks.) in dollars, that's capital cushion of $90 billion.
*Credit union mortgage delinquencies at the end of the first quarter stood at only 0.7%. First mortgage charge-offs were a miniscule 0.06%.
*More broadly, credit union loan delinquencies have edged up, but still are at a very low 1.0%.

Credit unions have steered clear of the subprime mess. We're still lending responsibly.

*In the first four months of 2008, mortgages at credit unions grew faster than all other loans. This at a time when mortgage losses have forced other lenders to scale back or close their doors entirely.
*Why? For one thing, credit unions operate more conservatively and tend to hold more of their mortgage loans (about 70% in fact) in portfolio rather than sell them to Fannie and Freddie on the secondary market. 
*Secondly, credit unions are member-owned and not-for-profit cooperatives. We exist to serve our members, not profit from them. Unlike the banks and brokers, we're not out to force loans on our members just to make a quick buck. 
*Today 56% of credit unions offer first mortgages, and 90% of the nations 90 million credit union members belong to one of the credit unions that offer first mortgage loans.
*To the extent credit unions have been impacted by the subprime debacle, it's primarily as "collateral damage" - members having trouble making payments on other loans because of subprime mortgage they've gotten elsewhere, or because some members are losing their jobs in today's down economy.
*But credit unions went into this with very strong balance sheets, and will still be in very strong shape when it's over.

Credit unions are a safe harbor for consumer savings

*Savings at credit unions so far this year have grown nearly 7%. In today's economy, consumers are increasing their savings in response to concerns about their economic future.
*More people seeking to put their money in a stable source offering good rates are turning to credit unions.
*As not for profit cooperatives, credit unions typically offer higher savings rates than banks. For a daily rate comparison, go to this link: http://www.creditunion.coop/ratedex.php   
*Consumers saved $10.9 billion last year by using credit unions rather than banks. The savings come in the form of lower fee, higher savings rates and lower loan rates. The works out to about $126 per credit union member or $239 per household.

Federal insurance covers credit unions too.

*Virtually all credit unions are federally insured by a fund that, like the FDIC, is backed by the full faith and credit of the U.S. Government.
*As the FDIC does for banks, the National Credit Union Share Insurance Fund (NCUSIF) insures a person's savings up to at least $100,000 -- with higher total coverage available of the member has a combination of individual, joint, trust, payable-on-death and other types of accounts; there is also separate insurance coverage of up to $250,000 for individual retirement accounts.
*The NCUSIF is administered by the Nation Credit Union Administration (NCUA), an agency of the federal government. To determine insurance coverage, see NCUA's insurance estimator at: http://webapps.ncua.gov/ins/