Silicon Valley Bank Failure Does NOT Affect Your Credit Union!

The announcement that Silicon Valley bank (SVB) failed and was taken over by the FDIC came as an unwelcome surprise. The news has negatively affected bank stocks and many of you may be wondering if Northeast Community Credit Union is at risk. The short answer is, we are NOT at risk! Northeast Community Credit Union remains VERY well-capitalized with ample access to liquid assets to meet member demand – in fact, we maintain more than double the required minimum reserves, and we were recently recognized in the ‘Top 100 Healthiest’ among all Tennessee financial institutions, both large and small. We are a community financial institution and we are federally insured. Our primary focus is our members and their needs and wants.

SVB was not a community institution. It existed primarily as a funding and depository institution for Silicon Valley tech companies and start-ups. A breath-taking 88% of its deposits were over the federal insurance limit. This explains the speed at which the collapse came, as the vast majority of depositors knew that their funds were at risk. Their frenzied withdrawals caused the bank failure.

Northeast Community’s balance sheet is much more diversified than SVB’s was. Rapid rate increases do not damage our value like SVB experienced. Most of all, Northeast Community Credit Union is a financial cooperative, owned by the members, not a bank owned by shareholders who may or may not be depositors. Our Credit Union does not issue common stock, so wild stock market fluctuations do not affect it. Northeast Community Credit Union is extremely safe, strong, secure, and remains a financial partner you can trust. Please feel free to contact us directly with any of your questions or concerns!