How safe is SDCCU

User Forum Topic
Submitted by newbiz on August 14, 2007 - 10:13am

I was trying to get some info on how stable SDCCU is and ended up reading their 2006 Anual report. I was not able to get much out of it. Here are the highlights

assets - 3.7 billion, wilth 2.7 billion in loans to members, 700 mil in non FAS 115 inverstments, rest in other investments

Liabilities - 3.2 Billion - mostly deposites from members

Only info I could find about their exposure to home loans is - home loans to 1400 members totalling 85 Mil in loan value in 2006.

What were they giving out as home loans 50K a pop?

Well, request to the financial gurus on the forum. Can you guys please explain what you think is the risk level of SDCCU, based on info you have access to about SDCCU.

Obviously, I have large depositis in SDCCU and I would like to be prepared than be sorry if something goes bad.
thanks

Submitted by bsrsharma on August 14, 2007 - 10:21am.

I have large deposits in SDCCU

 Notwithstanding anything anyone may advice here, my advice is simple. Chop it up into 100K blocks and spread around different institutions (in FDIC protected accounts). At least that is what I am going to do. Don't analyze those numbers too much. They mean nothing when the underlying asset class is of seriously suspect value.

Submitted by waterboy on August 14, 2007 - 11:03am.

I believe you can also put up to $1MM in money market with firms such as Edward Jones or LPL Financial as they split your money up between 10 different banks so it is all insured. I believe the rates are above 4.5% for $500k or more.

Submitted by bob2007 on August 14, 2007 - 1:29pm.

Does anyone have an understanding of the FDIC insurance on CDs at the same institution? A joint account for example:
- $200k insured in savings/checking combined ($100k each member)
- You then take out up to a $200k CD. I "think" that the total of all CDs you have at a single bank may be insured up to $200k for the joint account.

Does anyone know if this is indeed the case?

Submitted by bob2007 on August 14, 2007 - 1:33pm.

Looks like the CDs are combined with the other accounts. From the FDIC web site:
http://www.fdic.gov/deposit/deposits/ins...

Single Accounts
These are deposit accounts owned by one person and titled in that person’s name only. All of your single accounts at the same insured bank are added together and the total is insured up to $100,000. For example, if you have a checking account and a CD at the same insured bank, and both accounts are in your name only, the two accounts are added together and the total is insured up to $100,000.

Submitted by El Jefe on August 14, 2007 - 5:25pm.

IIRC, you can have up to 100K of single accounts insured AND additionally contribute up to 100K of FDIC insurance toward a joint account, totalling 200K/SSN.

IE

You(single acct): 50K checking + 50K CD

you + wife(joint acct): 200K CD

wife(single acct): 100K CD

All Insured.

Submitted by edna_mode on August 14, 2007 - 5:51pm.

Also, I would be careful about going over $100,000 for the whole *household*, in case of death. I had heard about a widow nearly losing $100,000 in her husband's name when a bank failed on the day her husband died. Since she had $100,000 already in her name, when her husband died, his account reverted to her name...fortunately, he died at 10pm, *after* the bank failed at 2pm, so technically she didn't lose half her life's savings!

Not that bank failures are that likely, especially coupled with a death, but if you're going to spread your risk around, why rely on a technicality to save you?

Submitted by Wiley on August 14, 2007 - 6:08pm.

First of all FDIC is really just an agreement amongst all the banks to support eachother. In full meltdown its useless. Really it wouldn't take that much for it to happen in our mad fractional reserve, derivative, structured world.

Second, be very careful about money market funds. Many are able to offer those 5% returns because they are buying mortgage securities and the like. The fund can drop below $1 nav.

I guess the safest is short term treasure bills which you can easily buy at Treasury Direct. Other then that foreign currencies and gold. IMHO.

Submitted by Wickedheart on August 14, 2007 - 8:51pm.

Credit Unions are covered by NCUA insurance. The amount of coverage depends on how the funds are held. If they are held in retirement accounts, Keogh and Roth IRAs are covered to $250,000 per account. It also depends on the ownership categories. Individual and joint accounts are covered to $100,000. You can get additional coverage for accounts that are held in a trust.

Basically an individual could actually have up to $600,000 in NCUA covered accounts. A married couple could have over a million in covered accounts and a family could have nearly 2 mil covered by NCUA insurance.

This is a PDF file but it explains it pretty well.
http://www.ncua.gov/ShareInsurance/Speci...

According to the NCUA not one penny of insured savings has ever been lost by a member of a federally insured credit union. I'm going with the credit union over the mattress.

Submitted by Wickedheart on August 14, 2007 - 9:28pm.

Wiley

FDIC and NCUA are insurance not just an agreement. T-Bills, NCUA and FDIC are all "backed by the full faith and credit of the United States Government- the strongest guarantee you can get". I just don't see the difference. I don't understand why you would feel T-Bills are any safer. Treasury bills aren't insured either.

Submitted by bsrsharma on August 14, 2007 - 9:59pm.

FDIC is really just an agreement

Not true. FDIC is pretty much a guarantee from Federal Government. If the funds run out, they will be replenished by taxpayers. It happened in the 1980s with FSLIC. FSLIC ran out of funds, it was closed down and the obligations were assumed by FDIC.

 

Submitted by davidt1 on August 14, 2007 - 10:53pm.

What about accounts with a broker, like a stock broker?

Submitted by bsrsharma on August 14, 2007 - 11:18pm.

accounts with a broker

 

The government has nothing to do with it. Many times, large brokerages take private insurance from Securities Investor Protection Corporation (SIPC) - to cover some risks (not investment loss risk though). In case of losses due to severe malpractice, the only recourse is legal action (sueing the brokerage, usually class action by lawers who specialize in securities fraud law)

see http://www.finra.org/InvestorInformation...

for SIPC insurance offered by FINRA (Financial Industry Regulatory Authority, Inc.)

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