After the news of a large bank failure in California last week, you may be wondering how LCCU is different and keeps your deposits secure. At LCCU, we carefully manage our deposit funds to ensure the best rates, access, and use of funds for our members.
As a member-owned, community development credit union, our top priority is the financial well-being of our members. LCCU is fundamentally different from single-industry and profit-focused banks.
Insured Deposits: All deposits in LCCU are automatically insured up to $250,000 by the National Credit Union Administration (NCUA). The NCUA is the Federal insurer of credit unions, equivalent to the Federal Deposit Insurance Corporation (FDIC) for banks. Since the creation of NCUA in 1970, no credit union members have lost any insured deposits.
Diversification: LCCU has over 120,000 members which means that loans and deposits are not concentrated in just a few members. Unlike single-industry banks, our members work across a range of industries that are not as significantly impacted by changes in the economy.
Financial Strength: Since 2000, LCCU has been carefully growing, with an exceptionally strong financial base and conservative financial management.
- Capital Ratio – LCCU has over 2 times the required capital base for credit unions to be considered well capitalized. This is the reserve that financial institutions maintain to cover potential losses. Due to our great membership who repay loans diligently, LCCU has an extremely low loss ratio of only 0.13%, which is nearly half that of our peers.
- Liquidity – LCCU maintains strict liquidity ratios, well over the required amounts, to ensure we always have the liquidity to provide members their deposits on demand, even if withdrawal demand rises unexpectedly. LCCU is conservative with its excess cash and never ties up its funds in risky or long-term investments. LCCU’s current cash to deposits ratio is 17%, well over the industry average of 7%. We also maintain access to multiple liquidity sources. Unlike most profit-driven banks, LCCU’s largest depositors are primarily mission-oriented and committed to LCCU’s long-term success.
- Income – Unlike some banks that depend on investments to generate revenue, LCCU’s income comes from its lending which has increased 25% annually over the past five years. This helps to ensure the financial strength and stable growth of your credit union.
- Regulation – LCCU is regulated by the NC Credit Union Division and undergoes annual examinations as well as multiple independent audits each year.
Because of this exceptional financial strength, LCCU can always accept additional deposits from our members, at our consistently competitive rates. Our term certificates continue to be a safe and attractive choice, with rates above the industry average. Your deposits are insured up to the NCUA limits of $250,000 for an individual account and $500,000 for joint accounts.
We thank you for your membership!
