With the recent collapses of community banks like Silicon Bank, Signature Bank, and First Republic, sharing the credit union difference is more important than ever. Some of these banks had a large share of their accounts above the amount insured by the government (over $250,000 per depositor) and were heavy into business accounts supporting startup companies or other riskier investments. By comparison, the credit union industry is risk adverse to the benefit and protection of their members.
- Credit unions are not-for-profit financial institutions, governed by a volunteer board of directors (comprised of their membership).
- Credit unions don’t issue stocks or bonds and do not have shareholders. Therefore, credit unions act in the best interests of their members and tend to be risk adverse to protect their members’ deposits.
- Safety and soundness are a priority in our industry. The net-worth-to-assets ratio is a determiner of financial strength and health. Credit unions in California have a net-worth-to-assets ratio average of 10.50%, much higher than the 7% required by regulators to be “well-capitalized.” By comparison, LBS Financial has a ratio of 12.74% as of April 2023.
- More than 90% of deposits at credit unions in California are insured.
- Deposits at credit unions are insured to at least $250,000 by the National Credit Union Administration (through the U.S. Government). This is a separate insurance fund from the FDIC that insures the banking industry. Members of credit unions have never lost a penny of insured deposits from a federally insured credit union.
- LBS Financial Credit Union only serves individuals and does not offer business loans and accounts.
We value people over profits and do not take risks at the expense of our Members. When you place your deposits in LBS Financial, you are banking with one of the strongest and most stable credit unions in the state of California.
