What is the National Credit Union Administration (NCUA)?
The National Credit Union Administration (NCUA) is an independent agency created by the U.S. government to regulate and protect credit unions and their Member-owners.
Credit unions are non-profit organizations owned and controlled by the Members who use their services.
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Just like banks, credit unions are federally insured. Bank account deposits are insured by the Federal Deposit Insurance Corporation (FDIC) and credit union deposits are protected with NCUA insurance. This insurance (up to $250,000 per account) makes credit unions as safe as traditional banks.
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Call 866.287.6225 today to schedule a no-obligation consultation and learn about our mortgages, home equity lines of credit, auto loans, personal loans, checking and savings accounts, and other banking products. As a full-service financial institution, we look forward to helping you with all your banking needs.
History of the NCUA and NCUSIF
The National Credit Union Share Insurance Fund (NCUSIF) was created by Congress in 1970 to insure Members' deposits in federally insured credit unions. Each credit union Member has at least $250,000 in total coverage. Administered by the National Credit Union Administration, the NCUSIF insures individual accounts up to $250,000.
A Member’s interest in all joint accounts combined is insured up to $250,000.
The NCUSIF also separately protects Members’ IRA and Keogh retirement accounts up to $250,000 and provides additional coverage for Members’ trust accounts. The NCUSIF has the backing of the full faith and credit of the United States. Credit union Members have never lost even a penny of insured savings at a federally insured credit union.
How does the NCUA work?
The National Credit Union Administration’s mission is to ensure the nation’s system of cooperative credit remains safe. To achieve this, the agency’s examination program focuses on risks to the broader system and the National Credit Union Share Insurance Fund. Through the NCUA’s rule-making process, it creates a regulatory framework that maintains a safe and sound credit union system.
Responsibilities of the NCUA:
- Insure deposit accounts at federally insured credit unions
- Grant charters for new credit unions (A charter is a license to operate)
- Oversee and executes regulations in the U.S.
- Monitor credit union operations
The NCUA also works to protect credit union Members and consumers, raise awareness of potential fraud, facilitate access to affordable financial services, resolve disputes with credit unions, and educate consumers on the importance of savings and how they can improve their financial well-being.
NCUA vs. FIDC: what's the difference?
As mentioned earlier, the NCUA is the federal insurer of credit unions. NCUA insurance covers Members if their credit union fails and cannot return their deposits that are held in checking, savings, share certificates, and money market accounts. NCUA insurance provides coverage up to $250,000 per individual depositor per credit union.
The Federal Deposit Insurance Corporation (FDIC) insures banks. The FDIC is an independent agency created by Congress to maintain stability and public confidence in the nation’s financial system. The FDIC insures deposits, and examines and supervises financial institutions for safety, soundness, and consumer protection, in addition to other responsibilities.
What does the NCUA cover?
The NCUA insures:
What's not covered by the NCUA?
While the NCUSIF coverage protects Members at all federally insured credit unions from losses on a broad spectrum of savings and share draft products, it does not cover losses on money invested in:
- Mutual funds
- Life insurance policies
- Annuities offered by affiliated entities
Are credit unions safer than banks?
Credit unions are not-for-profit organizations that offer more personalized financial services compared to traditional banking institutions.
When it comes to whether credit unions are safer than banks
, consumers can be confident that their deposits are indeed as safe as accounts held at traditional banks. Some regulatory experts say that credit unions are safer than banks in times of recession, due to the not-for-profit structure of credit unions. Because banks operate for-profit, their organizational investment strategies could make them more vulnerable to asset liquidity issues.
Advantages of credit unions include lower interest rates for loans, higher interest rates on deposits, and lower fees and service charges.
Are all credit unions NCUA insured?
Many, but not all, state-chartered credit unions are insured by the NCUA.
According to the NCUA, credit unions need a charter from either the National Credit Union Administration or a state credit union regulator. The federal government and state governments have different chartering rules and requirements.
An applicant seeking to charter a state-chartered credit union federally insured by the NCUA will need to submit an insurance application to the NCUA. The NCUA will review the application, including the business and marketing plan, for insurability.
How to know if a credit union is NCUA insured
Federally insured credit unions are required to indicate their insured status in their advertising and to display the official NCUSIF insurance sign in their offices and branches.
Why savvy consumers choose CU SoCal
For over 60 years CU SoCal has been providing financial services, including mortgages, Home Equity Loans, HELOCs, car loans, personal loans, credit cards, and other banking products, to those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County.
Apply for Membership at CU SoCal Today!
Please give us a call today at 866.287.6225 today to schedule a no-obligation loan consultation with a CU SoCal Member Services specialist.