With recent news regarding California-based Silicon Valley Bank and New York-based Signature Bank being placed into receivership by regulators, it is important to realize that these two failures were based solely on the institutions’ decisions and not reflective of a systemic economic failure. As a valued member of our Pearl Hawaii Federal Credit Union ‘Ohana, we understand you and your loved ones may have questions for which we hope that the following points will adequately satisfy any concerns.
- Pearl Hawaii Federal Credit Union continues to be a safe, strong and well capitalized financial institution.
- Pearl Hawaii Federal Credit Union deposits are protected by the National Credit Union Share Insurance Fund and insured up to at least $250,000 per depositor – the same as any other federally insured financial institution. Credit union members have never lost a penny of insured savings at a federally insured credit union.
- While the media highlights the failures of Silicon Valley Bank and Signature Bank as the second and third largest failures, respectively, since 2008, we are not facing another financial crisis like we endured 15 years ago. What happened is the result of two institutional failures – their failed management of assets and liabilities – not a systemic failure.
- Silicon Valley Bank was heavily concentrated in startup companies and venture capital firms, while Signature Bank was heavily focused on banking crypto companies. These unique business models are not representative of most banks and credit unions in the U.S. financial ecosystem.
- Federal regulators took swift action to ensure depositors of these two banks were able to access their funds Monday morning, 3/13/2023. The FDIC will pay out all deposits and as reported recently, any loss to taxpayers from paying out such deposits will be recouped by a special assessment on all banks.