AUSTIN, Texas – American Share Insurance’s announcement of a 0.15% premium assessment has convinced Velocity CU’s board that it is best for the credit union to remain with NCUA coverage.
The $481-million CU’s membership had approved a conversion from NCUA to ASI, but the board made the final call.
“One of our primary reasons for considering a conversion to ASI was because they had not charged a premium in their 35-year history,” said Velocity CU President Debbie Mitchell in a prepared statement. “However, on the final day of Velocity’s member vote to convert, ASI announced an assessment of its credit unions for the exact amount of the NCUA assessment.”
Mitchell noted that the ASI assessment did not include Velocity. Last year Velocity was assessed a premium of approximately $675,000 by NCUA, which in part led to the decision to consider conversion [CU Journal, Dec. 7, 2009]. Mitchell said the CU determined that NCUA now “remains the best option for insuring our member’s deposits.”
When contacted by CU Journal, a Velocity spokesperson declined further comment.
Velocity has notified its members, the Texas Credit Union Department, NCUA and ASI of its decision.
John McKechnie, NCUA director of public and congressional affairs, said the agency was not involved in Velocity’s latest move. “NCUA's role is to validate the voting process regarding conversion, and ensure that members are fully informed of the issues involved. The decision to remain federally insured rests with the membership and board of Velocity Credit Union.”
Velocity’s decision comes on the heels of the Pleasanton, Calif.-based SafeAmerica’s announcement that it has converted to ASI to skirt the costs of the corporate credit union bailout.
Dublin, Ohio-based ASI could not be reached for comment by press time.
