Bank/credit union health

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Thetallestmanonearth's picture
Thetallestmanonearth
Status: Gold Member (Offline)
Joined: Feb 28 2013
Posts: 320
Bank/credit union health

How does one check on the health of the bank or credit union they use? For example, does my bank have exposure to derivatives? Checked my credit unions website and couldn't find any disclosures. Is there a document or something I can request?

hammer6166's picture
hammer6166
Status: Bronze Member (Offline)
Joined: Apr 30 2010
Posts: 25
Bank vs Credit Union Health and Ratings

The Bank Rate site has a link that I found useful. 

http://www.bankrate.com/rates/safe-sound/bank-ratings.aspx

I've been meaning to look this up.  My belief has been that credit unions are safer.

The number of failed credit unions can be found in the NCUA annual report.  Look in statistical data:

http://www.ncua.gov/Legal/Documents/Reports/AR2013.pdf

The FDIC lists the banks that have failed:

https://www.fdic.gov/bank/individual/failed/banklist.html

Wikipedia indicates there are roughly that same number of banks and credit unions and banks have 8 times more deposits than credit unions:

"As of the end of 2007, the National Credit Union Share Insurance Fund insured more than $560 billion in deposits at 8,101 not-for-profit cooperative US credit unions.[14] For comparison, the FDIC insured more than $4 trillion in deposits at 8,560 banks and thrift institutions.[15] The NCUA and the FDIC are both independent federal agencies backed by the full faith and credit of the US government."

http://en.wikipedia.org/wiki/Credit_unions_in_the_United_States

The total assets in banks and credit unions:

 

http://www.cuna.org/Research-And-Strategy/Credit-Union-versus-Bank-Comparisons/Market-Share-of-Total-Assets---Banks-vs_-Credit-Unions/

Banks have 8 times the deposits and 14 times the assets. I think this could be read that banks have lower reserves and therefore are more risky.

Percentage wise, more banks failed and banks are more highly leveraged.

One tidbit hidden in the lower credit union failure numbers is the liquidation of two of the largest credit unions. These liquidations caused a special assessment and additional federal government intervention.

On the whole, credit union do appear to be safer, IMO. However, credit unions do fail so double checking the health of the institution you choose is worthwhile.

 

bobwise32952's picture
bobwise32952
Status: Member (Offline)
Joined: Jan 19 2010
Posts: 9
Credit Union Safety

The Bankrate website is very helpful- gives overall star ratings, asset ratings and balance sheets.

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