In the wake of the failures of IndyMac Bank and Washington Mutual, many consumers are becoming more and more concerned about the soundness of their financial institutions.

Where some financial institutions are reeling from the economy, credit unions are not, according to Daniel Penrod, an industry analyst with the Rancho Cucamonga-based California Credit Union League.

"Credit unions as an industry are well capitalized," Penrod said. The National Credit Union Association mandates that each credit union have a 6 percent capitalization rate, while any reserves over 7 percent are considered well capitalized, he said.

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"It translates into even in difficult times there is a reserve to weather the storm," Penrod said. "We've had no failures of credit unions in the Inland Empire. You will not see an IndyMac type failure with a credit union."

Larry Sharp, president of Arrowhead Credit Union, said his company has a reserve rate of 10.1 percent.

"We are in a good position in terms of our reserves," Sharp said. "We would normally run less, but we have been building them up from what we've been seeing in terms of the economy from last year."

Credit unions, not-for-profit financial institutions owned by their members, may be among the safest financial institutions in the nation, despite our nation's current economic struggles. And as a result, they are gaining recognition among consumers as well as on Capitol Hill for not only having avoided the problems that created today's financial mess but for being a huge part of the solution.

"We have stuck close to what credit unions traditionally do," said Gregg Stockdale, CEO of First Valley Credit Union. "There were some credit unions that were overly aggressive in building their portfolio, and those people took a correction but didn't fail."

Stockdale said his company focuses on savings and checking accounts, auto and home loans and CDs and avoided the subprime mortgage business. "I think the days of buying a home with no money down and flipping it are over, and rightfully so," he said.

Based in San Bernardino, First Valley Credit Union has six branches, $33 million in assets, about 4,000 members and 1,900 loans.

Penrod acknowledged that some credit unions have invested in mortgage-back securities, but "they have not required one dime of bailout to date."

"I think we have gotten away from the majority of our problems coming from the mortgage crisis to being the result of rising unemployment, bankruptcies that come hand-in-hand with a normal downturn in the economy," Sharp said. "We didn't issue any subprime loans, so we weren't hurt. We didn't maintain a portfolio of home loans because we sold them off."

Based in San Bernardino, Arrowhead Credit Union has 161,000 members, $1.35 billion in assets and 28 branches.

Legislation passed by the U.S. House of Representatives on Oct. 3 will increase the level of federal insurance for credit union savings to $250,000. The legislation will do the same for savings in banks insured by the Federal Deposit Insurance Corporation (FDIC).

"Federally insured savings at credit unions will have the same level of coverage as savings in federally insured banks once this legislation is passed by the Congress," said Daniel A. Mica, president and CEO of the Credit Union National Association, the trade association for credit unions.

"News stories about the increase in federal insurance need to reflect the fact that credit unions are included in the legislation - 90 million credit union members across the nation need to know about this development," he said.

The legislation (the "Emergency Economic Stabilization Act of 2008") would increase federal savings insurance coverage from $100,000 to $250,000. The increase would be temporary, taking effect from the date of enactment of the legislation until Dec. 31, 2009.

Stockdale said the increase in federal insurance would be good for the industry, but most of his depositors were not over $100,000. He said customers with more than $100,000 usually have their money spread out in several different accounts making them eligible for insurance on all their accounts

According to the Credit Union National Association:

Credit unions are very well capitalized so they are in good shape

This year has the lowest earnings seen in the history of credit unions due to rising loan losses

With the weakening economy, consumers are spending less but saving more, therefore loans have slowed down but saving deposits have increased at credit unions

Delinquencies are up but low in comparison to other financial institutions. Last year the delinquency rate was at .02 percent; this year it is .06 percent.

Credit unions are still lending more than other institutions, though they remain prudent lenders.