We’re following the latest developments and offering key points to address concerns.

In a brief address this morning, President Biden assured the public that the nation’s financial system is safe, saying, “your deposits will be there when you need them” adding, “no losses will be borne by the taxpayers.”

Federal regulators have taken extraordinary steps to stave off a potential banking crisis following the collapse of three banks since last week. Details on the latest developments can be found below.

While credit unions were not involved in the failures, members may have some concerns. Here are key points to share:

• Credit union deposits in federally insured credit unions are safe and secure.

• Credit union deposits are protected by the National Credit Union Share Insurance Fund and insured up to at least $250,000 per individual depositor – the same as any other federally insured financial institution.

• In several states, Maryland included, private deposit and excess deposit insurance is permitted through American Share Insurance (ASI). ASI has provided private primary insurance for up to $250,000 per member account since 1974 without experiencing a loss.

• All credit unions are regularly examined by financial regulators to ensure proper management and maintain the safety and soundness of members’ money within the institution. 

The Latest Developments

Bank Failures

California-based Silvergate Bank, a lender to the crypto sector, announced it would wind down on March 8 due to losses suffered in its loan portfolio.

On Friday, March 10, regulators shuttered California-based Silicon Valley Bank, a tech-focused financial institution.

On Sunday, March 12, regulators shutdown New York-based Signature Bank, a big lender in the crypto industry.

Steps Taken to Shore Up Banking System

• In a joint statement on Sunday, leaders of the U.S. Treasury Department, Federal Reserve and FDIC said all deposits would be protected, not just the $250,000 covered by the FDIC.

• The Federal Reserve announced the creation of a new Bank Term Funding Program designed to protect against financial risks by offering loans of up to one year in exchange for U.S. Treasury bonds and mortgage-backed securities that have lost value. The Fed will honor the debt’s original value for the banks that take the loans.

• President Biden is asking Congress and regulators to take steps to prevent more bank failures.

• Silicon Valley Bank and Signature Bank have not been rescued, and taxpayer money has not been provided to them.