As of June 30, 2002 approximately 8.1% of all credit union shares were uninsured by the National Credit Union Share Insurance Fund (NCUSIF), a dramatic increase from the 4.2% of all shares only five years ago. The amount of uninsured shares has risento almost $39 billion, up from $12.7 billion in 1997 (see chart below). The combination of high share growth at credit unions and the increase in the percentage of uninsured shares has led to this astounding 25% annual compounded growth rate overthe past five years.
The impact of this trend is felt more heavily at larger credit unions. Over 9% of shares are uninsured at credit unions over $50 million in assets and that number increases to 10.2% for credit unions over $250 million in assets.
One option some credit unions utilize to help protect these uninsured shares is to obtain private excess deposit insurance to cover member share balances over the $100,000 the NCUSIF protects. Converting exclusively to private insurance is also an optionfor some state chartered credit unions. Last month Patelco Credit Union ($2.8 Billion in total assets) finalized the conversion process for private deposit insurance to covermember share balances up to $250,000. With the completion of this conversion Patelco, which previously had over $470 million in uninsured shares or 18.5% of total shares, will reduce the amount of uninsured member shares significantly.
Excess insurance covers balances over $100,000 and is availible in many states from several private share insurers. Since June 1997, the number of credit unions with excess share insurance has also increased 44% from 383 to 551 covering $6.25 Billionin shares over the $100,000 NCUSIF limit.
|Rank||State||Credit Union||Uninsured Shares||$ Assets||% of Shares Uninsured|
|3||IL||United Airlines Employees||672,155,195||3,917,862,442||19.72%|
|4||CA||Orange County Teachers||613,217,850||3,683,926,689||18.92%|
|8||CA||The Golden 1||396,060,429||4,080,250,629||10.81%|
|18||IL||Citizens Equity First||237,872,198||2,369,426,082||11.26%|
|20||TX||Texas Dow Employees||212,764,526||713,213,859||33.71%|
|23||CA||San Diego County||179,458,255||1,870,936,929||10.80%|