Top Insurer Fights Measure that Would Shut It Down
WASHINGTON - National Deposit Insurance Corp., the nation's largest private insurer of credit union deposits, is struggling to survive.
NDIC's problems are political, not financial.
The company, based in Dublin, Ohio, is battling lawmakers who are convinced that private insurance is too risky and ought to be abolished.
Reacting to the mess in Rhode Island, where a bankrupt private insurer led to the failure of numerous credit unions, the House Banking Committee wrote a provision into the banking bill that requires all credit unions to get federal deposit insurance within two years.
Pulling on all the strings at its disposal, NDIC is changing its name to avoid the negative connotations of "deposit insurance" and rallying credit union members to deluge key members of Congress with letters.
Officials said that as of Nov. 13, they will change the insurer's name to American Share Insurance Corp. The reason: NDIC sounds too much like FDIC, the Federal Deposit Insurance Corp. Letters from just one-third of NDIC's 400 credit unions this summer produced 20,000 missives to members of the Senate Banking Committee. NDIC insures $5.6 billion in deposits in 22 states.
The senators may have gotten the message. The Senate version of the bill would simply require a credit union to disclose that its deposits are protected by private, not federal, insurance.
Dennis R. Adams, president of the insurer, said a new batch of letters began arriving in congressional offices last week. They are aimed at House members who are likely to be on the conference committee that irons out differences between the House and Senate bills. The goal: to persuade the House conferees to back off the two-year phase-out and go with the disclosure required in the Senate bill.