Federally Insured Credit Unions
Many credit unions are federally insured credit unions. The National Credit Union Administration (NCUA) is the federal agency that administers the National Credit Union Share Insurance Fund (NCUSIF). The NCUSIF, like the FDIC’s Deposit Insurance Fund, is a federal insurance fund backed by the full faith and credit of the U.S. government.
As of November 2008, there were 8,176 federally insured credit unions with over 92 million members and total assets of $833.7 billion and loans of $582.4 billion. As the insurer and regulator of federally chartered credit unions, the NCUA oversees credit union safety and soundness, much like the FDIC. It is sometimes required to place credit unions in “conservatorship”.
Not one penny of insured savings has ever been lost by a member of a federally insured credit union. As a member of a federally insured credit union, you do not pay directly for your share insurance protection. Your credit union places a deposit into the NCUSIF and pays an insurance assessment based on the total amount of insured shares and deposits in the credit union. Federally insured credit unions are required to deposit and maintain 1% of their insured shares and deposits in the NCUSIF.
Most properly established share accounts in federally insured credit unions are insured up to the Standard Maximum Share Insurance Amount (SMSIA), which has been $100,000 since the passage of the Depository Institutions Deregulation and Monetary Control Act in 1980. The Emergency Economic Stabilization Act passed in October 2008 to address the subprime mortgage crisis increased the insurance coverage on regular share accounts to $250,000 until December 31, 2013. Certain retirement accounts, such as IRAs and Keoghs, are insured separately, and had their coverage raised to $250,000 under the Federal Deposit Insurance Reform Act of 2005. Generally, if a credit union member has more than one account in the same credit union, those accounts are added together and insured in the aggregate.
There are no bank rates involved but check details about other areas of coverage if your credit union is one of federally insured credit unions.
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