Private Deposit Insurance Makes Texas-Sized Comeback
AUSTIN, Texas — Private deposit insurance for credit unions made a comeback in the Lone Star State Friday when the Texas CU Commission approved an application from ASI to private coverage for state chartered credit unions.
The comeback was a long time in coming since the state folded up its private insurer, known as Texas Share Guaranty, in 1992, after the failure of Rhode Island Share and Deposit Indemnity Corp. caused public confidence in private insurance to plummet.
The Texas fund was one of a dozen private credit union insurers to fold in the wake of the RISDIC crises. But the Texas Commission, which barred all but federal insurance under NCUSIF at the time, opened the door in 1999 when it adopted rules to provide an option to federal insurance.
Dublin, Ohio-based ASI, which is the only surviving competitor to federal deposit insurance, currently insures primary shares (up to $100,000) in eight states, and excess shares (over $100,000 per account) in 32 states.