Safe Austin credit unions and banks

[scm53]

Originally Posted by Austin97

The problem is that the government has said that we dont own our deposits. We are unsecured creditors. So to be made whole we can be given shares in the failed institution. You do not have to be paid in cash

If you are in an insured account - in a bank or a NCUA member credit union - you are paid in CASH up to $250K per account.

Brokerage or MM accounts - not so. But that wasn't what the OP was asking about.

[Moonlady]

Originally Posted by scm53

Credit unions bought residential mortgage backed securities just like every other financial institution. In fact, losses on those led to the failure of the largest federally chartered CU at the time. Credit unions are no more or less likely to fail than any other financial institution - thirteen have failed in the US in 2013 YTD.

Bottom line is, if your money is in a federally chartered bank, or in a federally chartered CU ("Federal" in the name) or a state chartered CU that is a member of NCUA, you are insured up to $250,000 of deposits.

I belonged to one of these credit unions that made risky investments and ended up taking huge losses and ultimately ended up in conservatorship and closed their Austin branch. Yes, our money was safe, but we suffered with lower and lower interest rates on savings during their loss period and then the hassle of having to move our accounts after 34 years.

So, it's probably in a member's best interest to make sure their CU is financially stable.