In light of recent bank failures and the sub-prime mortgage mess, the advantages of credit unions are receiving a lot of media attention. Here are a few comments to check out.

Hear from Dan Mica of the National Credit Union Administration ( NCUA).

Here's a quote from an article that appeared in the Austin American Statesman on September 26, 2008:

"Q. What would be the impact of the government's financial rescue plan on credit unions?

A. The impact on credit unions would seem to be minimal. These nonprofit cooperatives do not hold many of the investments that are poisoning other financial institutions, so they have weathered the crisis fairly well.

Credit unions have kept about 70 percent of their mortgage loans on the books, meaning that they did not sell them off to other institutions, according to the Credit Union National Association. The group said that less than 1 percent of credit union mortgages were in delinquency at the end of the first quarter. Delinquencies on other loans have edged up to 1 percent. "If they've got their money in a federally insured credit union, they're just hunky-dory," association spokesman Patrick Keefe said."

Additional material from The Washington Post, The Associated Press and Cox Washington Bureau.

CNN aired a story about the safety of credit unions on September 18, 2008. Here's a synopsis:

ATLANTA (9/19/08)--"If there's a calm in the economic storm, it may be credit unions, whose investors are sleeping through the night," reported Susan Lisovicz of CNN Thursday during an interview with Neil Weinberg, senior editor of Forbes Magazine.

"We've had mergers and bailouts and a lot of us are nervous. Tell us why we should take a second look or in some instances a first look at credit unions," asked Lisovicz, amid banner headlines that said, "Credit unions weather rough seas." Weinberg's answer focused on two reasons why "credit unions are a safe harbor":

Credit unions are operated as a "stable and profitable business, taking deposits from you and me through our savings and checking accounts, and lending out money for car loans, which earns a spread that is profitable."

Most credit union accounts are federally insured by the government up to $100,000*.

"Credit unions tend to be conservatively managed and federally insured, which in this day and age is what you want," advised Weinberg. He explained that through lobbying in Washington, credit unions have "managed to open the doors of membership quite a bit" and in many cases a person related to someone in an affinity group can join a credit union."You want to jump on board," Weinberg advised.

When asked what is it about credit unions that doesn't lead to the same kind of forecast for other commercial institutions, Weinberg said credit unions haven't got into the same trouble as commercial banks that specialized in mortgages and made risky home loans. "Typically, credit unions have federal charters and federal inspectors, with strict, tougher rules. Because they began as agricultural cooperatives, they are run conservatively. You want to go for those credit unions."

"I got the message," said the Lisovicz. "You want to go for a credit union. Grab them while you can."

Want to learn more about credit union savings insurance? NCUA Vice Chair Rodney Hood recently gave a 12-minute interview explaining how NCUA insurance works. Click on the image (right) to hear the interview.

You can also use the NCUA's share insurance estimator to find out how much coverage you currently have. Just enter basic account and ownership info, and it will tell you how much is covered.

The NCUA's Consumer Assistance Center is available between 7 a.m. and 5 p.m. central time to answer share insurance questions. Call 1-800-755-1030 and press "1".

Dick Ensweiler, President and CEO of the Texas Credit Union League, had this to say about Texas credit unions on September 25, 2008:

Last night, President George W. Bush, in describing the economic crisis in America, brought up the issue of government deposit insurance. It's important for credit union members and the public to know why they can count on the safety and soundness of their credit union.

Credit Unions, which function as not-for-profit, non-market based financial cooperatives, have remained well capitalized nationwide and are in particularly good condition in Texas, even amidst the current economic crisis. Credit unions are owned by the members and are not publicly traded on Wall Street. As such, they remain largely insulated from severe market swings. In addition, member deposits are safe and sound, secured by a federal deposit insurance fund established for credit unions specifically and that fund remains healthy. Deposits are insured up to $100,000*, and up to $250,000 for retirement accounts.

For more about federal savings insurance at credit unions, see the "America's Credit Unions" website.

And finally, here's a quote from a letter sent to President Bush by CUNA representatives recently regarding the current financial crisis:

“Credit unions are gaining increasing recognition for the fact that they have not contributed to this crisis, having remained faithful to sound loan underwriting and avoiding subprime lending.”

*A law took effect October 3, 2008 increasing the insurance coverage from $100,000 to $250,00.