Lubbock, Texas-based Alliance Credit Union has converted from a federal charter to a state charter, while concurrently switching from federal share insurance to private insurance through American Share Insurance.
ASI announced the change today, which marks the fourth in a line of credit unions converting to state charters and private share insurance nationally, and the third Texas‐based credit union to join American Share, in the last 18 months.
According to Scott Rose, president and CEO of Alliance, one of the main reasons he and his board of directors chose to convert to private insurance was due to the fact that the role of the regulator and insurer "needs to be differentiated, and this was not the case as a federal charter."
"I personally like knowing our insurer, from the examiners all the way up to the CEO," Rose stated.
Following conversion of insured status, Alliance also added excess share insurance of another $250,000 from Excess Share Insurance Corp. With this added coverage, each individual account of Alliance's members is now insured up to $500,000.
"This expanded coverage effectively doubles the protection that we could provide our members before," stated Rose.
Also, Rose said his CU chose to move to a state charter and partner with American Share because it wanted to be regulated by local government officials that "better understand the needs" of Texas residents.
"Accessibility to the Texas Department of Credit Unions, the Texas Legislature and the Governor, allow state‐chartered credit unions a greater opportunity to affect credit union policy and provide more input into their governance than their federal counterparts," he added.
American Share's President and CEO Dennis Adams said he believes the newly‐named Alliance Credit Union isn't alone in this regard.
"The value of the state charter and private share insurance are being closely examined by many state and federally chartered credit unions around the country," he said. "Like the credit unions we serve, we are owned and governed by our members, and we have a fundamental responsibility to serve in their best interests."
