Patelco CU Reverses Course on Deposit Insurance

SAN FRANCISCO – Patelco CU, the nation’s 11th-largest credit union, said it is abandoning its short flirtation with private deposit insurance and returning to the coverage of federal insurance under the National CU Share Insurance Fund. The credit union cause a major stir in 2002 when it fled the federal insurance system for the coverage under ASI, the only surviving private deposit insurer. Dennis Adams, president of ASI, yesterday told The Credit Union Journal of the Patelco move: “The credit union has indicated some change in their business strategies. They're healthy and safe and so are we. We are fine with it.” While ASI hates to lose its biggest customer, Adams said there are some benefits as it helps the company reduce its concentration in California and improves its capital ratio. The move comes a month after a report in The Credit Union Journal Daily that Patelco lost $8.3 million last year caused a major stir among credit unions. Patelco representatives did not return phone calls seeking comment.