There was also much re-regulation, and double digit inflation in the early part of the decade was its own monster. It changed its name to the National Deposit Guaranty Corporation (NDGC) to reflect it was broadening its geographic reach, which would prove to be a key strategy.
A year later, it first introduced excess share insurance for credit unions.
Nationwide, the idea of an alternative to federal share insurance was taking hold.” But there were a lot of naysayers.
For one thing, just by the nature of how the private sector functioned, it was plagued with a lack of diversity, which is a deadly sin in all things financial. No wonder so many private insurers eventually failed.
According to ASI company history, “private share insurance was recognized for the first time in federal banking statutes, encouraging the continuation of the private share insurance option so long as consumer disclosures explained the private coverage sufficiently.” Another important year during that decade was 1993.
The company created and incorporated Excess Share Insurance (ESI) as a wholly-owned subsidiary of America Share to allow it to serve almost 225 credit unions in 33 state, instead of the 16 it served prior to ESI.
NDGC was one of only two funds operating in more than one state.
According to the report, “history shows when private insurers fail, depositors at other privately insured institutions, even if those institutions are healthy, lose confidence in their institutions as news of the failures spread.
This is the fourth in a series of articles that look at the evolution of deposit insurance in America.
Last month looked at private deposit insurance, this article presents an overview of deposit insurance in America, with an emphasis on American Share Insurance (ASI). The company, which insures deposits for credit unions, has been in business more than 40 years. While at one time they faced competition, they outlasted them all. Their philosophy from the beginning was simple, credit unions should be able to meet the needs of their members without undue outside interference in daily operations.
This is especially noteworthy since ASI has no government backing. Thanks, goes to credit union pioneer Louise Mc Carren Herring. It was founded as the Ohio Credit Union Shareholder Guaranty Association (OCUSGA) in 1974, by Mc Carren Herring and a handful of other credit union enthusiasts.
According to ASI company history, it was set up as a "credit union-owned, private sector alternative to federal share insurance, which was first enabled under federal law in 1971.