California CUs flooded by former IndyMac clients

LOS ANGELES (7/18/08)--California credit unions have seen a flood of IndyMac customers after the troubled thrift was taken over by federal regulators last week, reports the San Gabriel Valley Tribune (7/18/08).

E-Central CU and Wescom CU in Pasadena both told the newspaper that former IndyMac customers' inquiries have focused on safety, security and deposit insurance.

Wescom spokesman Joe Schaeffer said consumers seem to be looking for "some level of comfort and reassurance." Many new members have parked their funds in money markets because it's safe and liquid.

Pasadena-based IndyMac Bancorp Inc., suffered a severe downward slide in recent months as a result of a meltdown in the nation's housing and mortgage markets.

E-Central President/CEO Mike Theodore said he believed the mortgage lender's demise "was greed related."

"That's the difference between a for-profit company and a not-for-profit company," he told the newspaper, which pointed out that credit unions are non-profit institutions owned and operated entirely by their members.

Meanwhile, other California newspapers reported the state's more than 500 credit unions "remain safe and sound and continue to demonstrate positive growth."

California Credit Union League Analyst Daniel Penrod told the Fontana Herald News "while other financial institutions are experiencing financial difficulties and restricting services, California credit unions are well capitalized and in a great position to continue serving consumers."

He reiterated that credit union deposits are insured by the "National Credit Union Administration, an agency of the federal government, up to $100,000 per account with additional coverage of up to $250,000 for certain retirement accounts, and also by private insurers," said Penrod.

"Not one cent of taxpayer funds has ever been used to bail out a credit union," he said.

courtesy of cuna.org