Safety and Soundness
March 13, 2023
A message from our CEO, Jennifer Binkley-Heiting:
Dear Altura Members,
You have most likely seen the news about the recent closures of Silicon Valley Bank (SVB) and Signature Bank. In light of these events, Altura Credit Union wants to communicate to you, our Members and our local community, that we remain in a financially strong position, far above the federal regulatory level required to be well-capitalized. Our business model is based in safety and soundness and the credit union model, by its nature and purpose, operates in a completely different way than commercial and tech-focused banks. Our loan portfolio is diverse, well performing, and made to Members throughout Riverside County. Combined, our balance sheet and financial performance continues to be in an extremely positive position.
Both SVB and Signature Bank were publicly traded commercial institutions with the majority of deposits being held by wealthy individuals and companies in the tech-sector, with many loans being made to venture capitalists. Due to high inflation and the impact on the tech and crypto industries over the past year, both experienced strains on deposits and earnings which impacted their liquidity positions. This led to a decline in value of their publicly traded stock, which further eroded their liquidity positions. Subsequently, investors and depositors increased withdrawals last week and the impact ultimately led to the FDIC takeovers. Please keep in mind that the FDIC are regulators who routinely conserve institutions who are at risk, in order to facilitate safe operations and to protect consumers. Earlier this morning, the FDIC and the Federal Reserve announced in a joint statement that all depositors would be made whole and have access to their funds.
As a credit union, Altura’s model is based in safety and soundness. The credit union model was created to provide financial services to those with common bonds based on a foundation of helping common people obtain financial services and increase financial wellness through a shared-cooperative model. Furthermore, as a credit union, we are not publicly traded on the stock market, we do not raise funds from or make loans to venture capitalists, and we are limited to conservative investments by law. Additionally, all Member deposits are insured by the National Credit Union Share Insurance Fund.
Our stable and secure financial performance creates the opportunity to offer valuable products and services to you, our Members, while also protecting your deposits and providing you peace of mind. Our strength is rooted in the diversity of our Members and our communities, with over 175,000 Members who are not concentrated or reliant upon any one industry. A few examples of the many industries Altura Members represent include: education, local government and municipalities, healthcare, the Military, logistics, and construction. Furthermore, the majority of our loan portfolio is comprised of auto loans and mortgages made to our neighbors in Riverside County, which are consistent and well-performing assets.
Altura Credit Union has been a trusted partner since 1957 and we remain committed to serving you today and far into the future. We deeply appreciate the opportunity to serve you and are dedicated to our mission of enriching lives and empowering dreams. If you have any questions, please reach out to us through online banking via chat, our call center at 888-883-7228, or visit any one of our 21 branches (Altura Locations).
President and CEO
Altura Credit Union