CUNA Backs Private Insurance

OLYMPIA, Wash. – CUNA took the unusual step yesterday of issuing a statement endorsing private deposit insurance for Washington state credit unions. The step was unusual because, while CUNA was the original progenitor of a private insurance system–its state leagues once operated a network of two dozen private insurers–the national trade group traditionally refrains from lobbying state issues, leaving that to the leagues. But a private insurance system has been rejected by Congress, and more recently within the credit union movement by NAFCU. CUNA President Dan Mica alluded to this in a letter sent last week to the Washington Department of Financial Institutions in which he endorsed the state’s efforts to reinstitute the private insurance in the state. Mica suggested and “some within the credit union movement” are opposing private coverage to mask “an underlying distrust of state regulation.” Washington was one of more than two dozen states that offered private insurance for state chartered credit unions until the 1990 crisis in Rhode Island, after which the insurer in Washington and all but one other folded up. More than a dozen states still allow state chartered credit unions to offer private insurance through an entity that qualifies as the equivalent of the National CU Share Insurance Fund. American Share Insurance, the only surviving private deposit insurer, still covers about 200 credit unions, most of them in Ohio.