Banking Safely

The Importance of Deposit Insurance From the Colorado Office of Financial Empowerment

News of a few bank failures has dominated headlines in recent months. This may leave consumers wondering whether the money that they hold in deposits at financial institutions is secure. In fact, according to polling conducted by the National Endowment for Financial Education earlier this year, consumer trust in financial institutions has eroded due to volatility in the banking industry. However, the majority of consumer deposits held in mainstream state- or federally chartered banks and credit unions are protected by deposit insurance, including Bank On certified accounts. The Federal Deposit Insurance Corporation (FDIC) insures deposits at banks up to $250,000 per person. The National Credit Union Administration (NCUA) also insures deposits at credit unions up to $250,000 per person. Accounts at FDIC-insured banks, or NCUA-insured credit unions, are automatically protected at no cost to consumers. As there are some types of accounts that are not covered, it's always prudent to check with your bank or credit union that your money is held in an insured account. In a recent statement from Colorado State Bank Commissioner Ken Boldt and Financial Services Commissioner Mark Valente, the Commissioners, who oversee regulation of state-chartered banks and credit unions noted that Colorado financial institutions are in sound condition. Colorado consumers with questions about their financial institutions and whether deposit insurance applies to their accounts can take the following steps:

Contact the financial institution directly to verify that deposits are in an insured account, or with other questions or concerns. If you hold an account with an FDIC insured bank, visit the FDIC’s insurance coverage calculator. You can also contact the FDIC’s Information and Support Center or call them at 1-877-275-3342 (1-877-ASKFDIC). If you hold an account with a credit union, the NCUA provides information about deposit insurance, also has an insurance coverage calculator and consumer assistance at https://mycreditunion.gov/

CFPB Consumer Advisory: Money in payment apps may lack protections On June 1st, the Consumer Financial Protection Bureau released an analysis of deposit insurance coverage on funds stored through payment apps and found that consumer funds "can be at risk of loss in the event of financial distress or failure of the entity operating the mobile payment platform, and often are not placed in an account at a bank or credit union and lack individual deposit insurance coverage." An accompanying consumer advisory provides more information and guidance for consumers who use these apps.

View the Consumer Advisory

ABOUT THE PERSONAL INVESTMENT ENTERPRISE (PIE) PROGRAM

The Personal Investment Enterprise (PIE) program is a local savings program provided through Community Action Programs of Boulder County and Mile High United Way. The program is designed for low-income families to enroll in financial literacy classes and save through a matched saving account at a rate of 4 to 1. The first step in applying to the program is to attend an orientation meeting with Community Action Programs at Boulder County. They can be reached at 303-441-3998 or at [email protected]. For more information on the PIE program visit https://www.bouldercounty.org/families/community-action-programs/personal-investment-enterprise/ or https://unitedwaydenver.org/personal-investment-enterprise-pie-program/. To see if you qualify, take this survey: https://www.surveymonkey.com/r/PrelimPIE.