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Safe at HCFCU
Q. Is my money safe at Hawaii Community Federal Credit Union?
A. Yes, your accounts at Hawaii Community Federal Credit Union are safe. We continue to be a financially strong and viable financial institution that is well capitalized. Furthermore, your accounts are insured by the National Credit Union Share Insurance Fund (NCUSIF) up to $250,000 and backed by the full faith and credit of the U.S. government.
Q. What if I have more than $250,000 in my account, is the rest of my money insured?
A. If you have more than $250,000 in your account, there may be ways that we can structure your account so that you can get federal share insurance coverage in excess of $250,000. Examples are having both an individual account and a joint account. Also, any IRA type of accounts that you may have with us are insured separately up to $250,000. Please let us know how we can help.
Q. How does U.S. Central and WesCorp differ from Hawaii Community Federal Credit Union?
A. These two credit unions are not regular credit unions like ours that serve individual members. There are a small number (28) of wholesale institutions that do not serve individual members but they provide liquidity, investment and payments services to credit unions like ours. It was two of these “corporate” credit unions that were placed into conservatorship, which means they are still operating normally but the U.S. government has taken them over.
Q. What actions caused U.S. Central and WesCorp to be placed into conservatorship?
A. Because of the nature of what they do, these corporate credit unions operate in the capital markets and hold highly rated, investment grade securities. But like so many others in those markets, they have seen the value of their investments decline in the current economic downturn, resulting in some actual losses. In the case of these two corporate credit unions, the losses were significant enough so that the government had to step in.
Q. Does Hawaii Community Federal Credit Union have accounts with U.S. Central and WesCorp?
A. We do not have an account with U.S. Central but we do have accounts at WesCorp. These accounts are insured up to $250,000 and backed by the full faith and credit of the U.S. government. The U.S. government has also guaranteed deposits beyond $250,000 in these institutions so that all excess funds we have invested in WesCorp are fully protected.
Q. Is Hawaii Community Federal Credit Union affected by the conservatorship of U.S. Central and WesCorp?
A. Yes, all federally insured credit unions will be affected by these actions. Our federal regulator, NCUA has instructed all credit unions to share in the cost of supporting the credit union system. These actions include expensing a portion of the NCUSIF deposit that all federally insured credit unions have and to send in additional funds in the form of insurance premiums to support the NCUSIF. It will mean a reduction in our net worth or capital but even after these actions we will still be well capitalized, sound and secure.
Q. What does it mean that Hawaii Community Federal Credit Union is well capitalized?
A. It means that over the years, we have developed a cushion from operating safely and soundly. Our capital cushion is stronger than you would find at most banks. As an industry, our average capital-to-assets ratio is more than 10% nationwide. That's considerably higher than the 7% industry standard for being “well capitalized” and higher than the banking industry's average of about 9%. This strong capital means credit unions are well positioned to absorb the costs of this action by NCUA (which intends to charge higher deposit insurance premiums) with minimal outward impact on our members.
Q. What does all this mean for me as a member of our credit union?
A. It's business as usual. The same level of quality service you receive from our credit union will continue. Our service to you is not affected by these government actions. Your own funds here are perfectly safe and federally insured up to $250,000 by the National Credit Union Share Insurance Fund and backed by the full faith and credit of the U.S. Government, just as the FDIC does for bank deposits. No credit union member has ever lost a dime of federally insured funds.