 10 Reasons Not to Worry
Thu, 03 Dec 2009 23:01:01 -0800
10 Reasons
Not to Worry
About Your Credit Union
1) Your Accounts are Insured
Not only is our credit union sound and stable, every credit union in Oregon is federally insured by a fund that is backed by the full faith and credit of the US government. The National Credit Union Share Insurance Fund (NCUSIF) insures accounts to at least $250,000 per account, just as the FDIC does for banks. To find out more information on the details of your insurance you can go to http://www.ncua.gov/publications/insured_funds/funds.pdf or come in to any one of our offices to get a copy of “Your Insured Funds”.
2) Balanced Loan Portfolio Mix
Since the beginning of Linn-Co FCU the Board of Directors has been careful not to put all of our “eggs” in one basket. For that reason we have limited the real estate portion of the portfolio to a maximum of 25%. We offer VISA Credit Cards, Home Equity Loans, Mortgage Loans, Unsecured Loans and Secured Loans. Our Secured Loans, which make up a substantial part of our loan portfolio, include new and used autos, RVs, and other titled security. By having a mix of loan types we work to diversify the portfolio and minimize our risk.
3) Conservative Values
Surviving as long and as well as we have is no accident. Our success stems from company roots that have created a fiscally conservative culture. We do try to think “out of the box” when it comes to serving our membership, but these products and services must always be weighed against the long term benefit to the credit union membership as a whole.
4) Regular Audits and Exams
We are closely monitored in 2 different ways. Firstly, our Supervisory Committee hires an auditor each year. Secondly, we have occasional federal exams from NCUA, the National Credit Union Association. Both of these audits thoroughly examine our books and procedures checking for sound business practices, healthy economic indicators and any issues of internal ethics.
5) Traditional Mortgage Products
In the last few years there has been great temptation for consumers to buy into “creative” mortgage products. It didn’t help matters that the industry was greedy to get loan dollars out the door at all costs. We never thought those products were good for our members or the credit union, so we chose to continue to fill the niche that a smaller (we say “unbig”) credit union fills best, the day to day traditional lending needs of the people of Linn County.
6) Local Linn County Leadership
Our Executive Management all live in Linn County, as well as every one of our employees. And being run by a local all-volunteer Board of Directors that guide our principals of operation gives Linn-Co a uniquely local perspective and control over our day to day decisions.
7) Loyal Membership Base
Because our members own us, credit unions generally have a more loyal member base. More loyalty can translate into fewer delinquency problems than larger more corporate institutions. Members know that if they take care of us, we’ll take care of them, and that’s never been more true than it is today.
8) Well Capitalized
Every month after paying our liabilities (dividends, payroll, bills, loan loss reserves, etc) the credit union puts money into what is known as “capital”. This capital helps ensure the stability of the credit union. Currently (as of June 30th, 2008) our capital ratio is 8.23% of our total assets. We are capitalized well beyond the goal set by our board 2 years ago (7.74%) and well within the range of our peers. We also spend a lot of time analyzing the risk in our portfolio and reserve fairly generously into our Allowance for Loan Loss. Our current delinquency ratio of 1.87% might seem high for some credit unions, but is not out of the ordinary for us at all. We genuinely try to serve as broad of a base in Linn County as possible. Our pricing structure takes our slightly higher delinquency into consideration, and after all is said and done we still have money going to our bottom line, our capital.
9) Exclusively Serving Linn County
Concentrating on serving Linn County alone means that our real estate values were never artificially inflated like they were in many of the larger metropolitan areas. Some Linn County residents, and unfortunately even a few of our members did over-extend themselves in more exotic mortgage products, but this problem compounded more in markets that had home values skyrocketing year after year. When this “bubble” finally burst in late 2007 we began to get a glimpse of exactly how much trouble this would cause some lenders. Fortunately Linn County isn’t one of the markets devastated by this phenomenon.
10) In Business Since 1956
Being in business for a long time gives us a better perspective, particularly better than say a mortgage broker who sets up shop when times are good and closes when the market gets tight. We’ve been through good times and bad, weathered the storms, and have learned how a financial institution can best thrive in the Linn County market.
|
