Hacker News Reader

Comment by caboteria | Hacker News Reader

As anyone who was living in Rhode Island around 1990 can tell you, credit unions are no more or less safe than banks. It's more about ensuring proper oversight in either case.

https://en.wikipedia.org/wiki/Rhode_Island_banking_crisis

View on HN

Only 300,000 depositors lost access. Considering the population of the United States as a whole, this seems like a pretty isolated and small incident, when you compare it something like the 2008 failure.

What makes you think this is sufficient evidence to claim that they are no more safe than banks?

Have there been other CU failures of note since 1990? (33 years ago)

I’m actually curious about your claim that they’re just as risky as banks. Is this true? Or are you just indicating that it’s at least possible for a credit union to go bad?

Of course they can go bad, they have insurance similar to FDIC. And just like small banks right now, they also have the problem on getting loans to make interest on. Mortgages have dried up. Refinancing is there too. Bigger banks have larger opportunities, so they may be safer with loans being down.

That they can go bad is not in doubt. The comment provided an example of this.

I'd point the burden of proof the other way, tbh. I don't see any reason one would be riskier than the other.

Credit unions failed all over the US in the late 1980s. In general it was badly managed loans, but there were cases of self-dealing. The then governor of Maryland, Harry Hughes, was doomed when it came out that he had a year or two earlier received a report predicting exactly what then happened, but had taken no steps to prevent the crisis. He lost in the Democratic primary.

Reply on news.ycombinator.com