Deposits are SAFE at Credit Unions
Consumers Deposits are Safe at Credit Unions
The collapse of Silicon Valley Bank (SVB) on Friday is the second largest failure of a financial institution in U.S. history. The bank was closed and put under the control of the FDIC following a 48-hour bank run and capital crisis. While this was not a credit union failure, the news may still create concerns. The following are some key points to reassure you:
- SVB 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.
- Federally insured credit unions offer a safe place for credit union members to save money. These deposits are protected by the National Credit Union Share Insurance Fund and insured up to at least $250,000 per individual depositor – the same as any other federally insured financial institution (e.g. FDIC).
- Credit union deposits in federally insured credit unions are safe and secure. All Pennsylvania credit unions are federally insured.
- Credit unions are regularly examined by their financial regulator to ensure proper operational management and maintain the safety and soundness of members’ money within the institution.
- Credit union members have never lost a penny of insured savings at a federally insured credit union. Credit unions’ insurance fund has the backing of the full faith and credit of the U.S. government.
- Please visit MyCreditUnion.gov for more information about the National Credit Union Share Insurance Fund coverage for consumers.
As seen in the most recent release from the NCUA’s Quarterly Data Summary Report, credit unions are in a strong financial position.
Consumers Should Be Alert to Cyberscams Related to the Silicon Valley Bank Failure
Following the collapse and federal takeover of Silicon Valley Bank (SVB) on Friday, March 10, scam artists wasted no time preying on the bank’s customers. One in particular is an email scam that initially targeted customers of businesses that banked with SVB when news first broke of the institution’s financial struggles and has only increased in volume following the bank’s failure and takeover by the Federal Deposit Insurance Corporation.
In the scam, fraudsters posing as companies that previously banked with SVB notify customers of those companies that because SVB cannot accept payments, they should wire future payments to a different bank. The fraudsters own the bank account that is provided in the new wire and payment instructions. The high visibility of the federal takeover makes these communications very convincing. The deceptive emails include details such as account numbers and names of individuals within the company that is purportedly making the wire instruction change. However, the wire transfer instructions included in the email are fraudulent and will direct funds to an account controlled by the scammers.
Potential targets need to be vigilant, especially in the current environment, when receiving emails requesting wire transfers or changes to wire instructions. If you receive an email requesting a wire transfer or a change to wire instructions (involving SVB or any other financial institution), always verify the request by contacting the party requesting the change directly using a phone number obtained from a reliable source, such as the company’s official website or previous correspondence.
Do NOT rely on telephone numbers or email addresses provided in the email that contains the wire change instructions.