What is the National Credit Union Association (NCUA)?
The National Credit Union Association, or NCUA, is an independent federal regulatory body responsible for overseeing the operations of credit unions, insuring credit union deposits, and protecting credit union customers in the United States. Part of the NCUA’s function is to monitor the credit union system to identify and mediate any potential risks, but it is probably best known for insuring customer deposits.
The NCUA insures credit union customer deposits up to $250,000, so if a member credit union should go bankrupt or otherwise fail, each of its depositors will be made whole up to (and possibly beyond) that amount.
NCUA vs. FDIC: What’s the difference?
The NCUA is very similar to the Federal Deposit Insurance Corporation (FDIC). While the NCUA monitors and insures credit unions, the FDIC works with commercial banks. Both organizations insure customer deposits up to $250,000, and both are independent federal agencies, but the FDIC is much older, having been founded by President Franklin D. Roosevelt in 1933 to restore public faith in the American financial system after the Great Depression.
How does NCUA coverage work?
If a credit union fails, the NCUA is responsible for managing the dissolution or sale of the institution and returning deposits to customers. If the NCUA liquidates a failed credit union’s assets, and the proceeds aren’t sufficient to return all customers’ deposits, the NCUA uses money from the National Credit Union Share Insurance Fund (NCUSIF) to repay each depositor’s full balance up to $250,000.
What types of accounts does the NCUA insure?
| Insured by NCUA | Not insured by NCUA |
|---|---|
Share savings accounts |
Stocks, ETFs, and mutual funds |
Share draft (checking) accounts |
bonds |
Certificate accounts (CDs) |
Life insurance policies |
Money market accounts |
Annuities |
Individual retirement accounts (IRAs) |
— |
When was the NCUA created?
The NCUA was created in 1970 by Congress along with the NCUSIF. It was preceded by the Bureau of Federal Credit Unions, which was part of the Federal Credit Union Act passed by President Franklin D. Roosevelt as part of the “New Deal” in 1934.
Who oversees the NCUA? Where does its funding come from?
The NCUA is overseen by a three-member board of directors, each of whom is appointed by the president and confirmed by the Senate. The board is responsible for creating and amending regulations and policy and approving the organization’s budget. Each board member serves a six-year term, but the terms are staggered such that only one board member departs or joins at any given time.
Most of the organization’s funding comes from fees paid by member credit unions, although some comes from the Share Insurance Fund itself.
Frequently Asked Questions (FAQ)
Below are answers to some of the most common questions depositors have about the NCUA.
Are all credit unions NCUA insured?
All federal credit unions and most state credit unions are insured by the NCUA. All insured credit unions display the NCUA logo somewhere on the premises of each branch, usually on or near the front doors.
What is the NCUSIF and how is it different from the NCUA?
The NCUSIF is the fund from which credit union share account holders are paid in the event their failed credit union’s assets aren’t sufficient to make them whole. The NCUIF is administered by the NCUA and is backed by the “full faith and credit” of the United States government.
Does the NCUA insure CDs? Business accounts?
The NCUA does insure certificates of deposit and business accounts, but it does not insure investment accounts (except for IRAs), annuities, or insurance policies.
What are NCUA call reports?
An NCUA call report is a financial report released by a credit union that includes its assets, liabilities, income, and expenses.
