The collapse of Silicon Valley Bank has generated a lot of news in the media and in the public. The collapse of Silicon Valley Bank on Friday March 10 is the second largest failure of a financial institution in U.S. history. The bank was shut down and put under the control of the FDIC following a 48-hour bank run and capital crisis. Over the weekend, regulators in New York closed Signature Bank which was deemed a systemic risk. Late Sunday, regulators shared that customers of Silicon Valley Bank and Signature Bank would have access to all their money starting Monday. The US Federal Reserve will also make additional funding available for eligible financial institutions to prevent runs on similar banks in the future.
While these two banks were not credit union failures, you may still have concerns. Here are some key points to help you understand the situation and to rest assured that your money at WLFCU/ Riverbank FCU is safe and secure.
- Silicon Valley Bank was a niche bank serving the technology industry, including tech start-ups, entrepreneurs, and venture capital firms. The bank was focused on a limited sector, which significantly increased its risk profile. Signature Bank was one of the main banks for cryptocurrency companies. Their banking business is completely different from that of a credit union.
- Consumers holding credit union deposits in federally insured credit unions can remain confident that their money is safe and secure.
- Federally insured credit unions offer a safe place for credit union members because all deposits at federally insured credit unions are protected by the National Credit Union Share Insurance Fund for up to $250,000 per individual depositor.
- Credit union members have never lost a penny of insured savings at a federally insured credit union, and our industry’s deposit insurance fund has the backing of the full faith and credit of the U.S. government. See MyCreditUnion.gov for more information.
- Credit unions are among the most well-capitalized financial institutions, maintaining equity reserves and investments that prioritize needed safety and soundness for their members.
- All Connecticut credit unions are regularly examined by multiple financial regulators to ensure proper management and maintain the safety and soundness of members’ money.