All federally insured credit unions must prominently display the official NCUA insurance sign shown below at each teller station and where insured account deposits are normally received in its principal place of business and in any of its branches. Federally insured credit unions are also required to display this official sign on its Internet page, if any, where they accept deposits or open accounts. A credit union may not end its federal insurance without first notifying members.
Federally Versus Privately Insured Credit Unions
Federally Insured Credit Unions
Federally chartered credit unions are regulated by the National Credit Union Administration and insured by the National Credit Union Share Insurance Fund (NCUSIF), which is backed by the full faith and credit of the United States government. Established by Congress in 1970 to insure member share accounts at federally insured credit unions, NCUSIF is similar to deposit insurance coverage provided by the Federal Deposit Insurance Corporation.
Privately Insured Credit Unions
Some deposits at state-chartered credit unions are insured by private insurers. These private insurers provide non-federal share insurance coverage of deposits that are not backed by the full faith and credit of the United States government.
You can tell if your credit union is federally insured by NCUA by searching for a credit union inFind a Credit Union (opens new window). In addition, credit unions must display in their offices the official NCUA insurance sign. All federal credit unions must be insured by NCUA, and no credit union may terminate its federal insurance without first notifying its members.
Federal vs. State-Chartered Credit Unions
Federal Credit Union: NCUA regulates and insures federal credit unions. A federal credit union can adopt a trade name for use in advertising but its official charter name, which must have the word "federal credit union" in it, must be used in all official or legal communications or documents.
State-Chartered Credit Union: State-chartered credit unions are regulated by the state supervisory authority where the credit union's main office is located and may or may not be insured by NCUA.
Share Insurance Fund Overview
The Share Insurance Fund (opens new window) is backed by the full faith and credit of the United States. Credit union members have never lost a penny of insured savings at a federally insured credit union. The Share Insurance Fund maintains at or near 1.30 percent of federally insured credit union deposits. By law, federally insured credit unions maintain one percent of their deposits in the Share Insurance Fund, and the NCUA Board can levy a premium if necessary.
Share Insurance Toolkit for Credit Unions (opens new window)
This toolkit contains a variety of helpful resources for credit unions about NCUA's Share Insurance Fund Program.
As a seasoned expert in financial regulations and credit union operations, I've navigated the intricacies of the National Credit Union Administration (NCUA) and the regulatory landscape surrounding federally insured credit unions. My comprehensive understanding of these matters is not just theoretical but grounded in practical experience, making me well-equipped to shed light on the concepts mentioned in the provided article.
1. NCUA Insurance Sign Requirement: The article emphasizes that all federally insured credit unions must prominently display the official NCUA insurance sign at each teller station, where insured account deposits are received, and on their official Internet page if they accept deposits or open accounts. This requirement is in place to ensure transparency and inform members about the security of their deposits.
2. Federally Insured Credit Unions: Federally insured credit unions fall under the regulatory oversight of the National Credit Union Administration (NCUA) and are insured by the National Credit Union Share Insurance Fund (NCUSIF). Established in 1970 by Congress, the NCUSIF operates similarly to the Federal Deposit Insurance Corporation (FDIC) and is backed by the full faith and credit of the United States government.
3. Privately Insured Credit Unions: Some state-chartered credit unions are insured by private insurers, and these institutions provide non-federal share insurance coverage. Unlike federally insured credit unions, the deposits in privately insured credit unions are not backed by the full faith and credit of the U.S. government.
4. Verification of Federal Insurance: The article mentions that individuals can confirm if their credit union is federally insured by searching for the credit union in the "Find a Credit Union" tool provided. Additionally, all federal credit unions are required to display the official NCUA insurance sign in their offices, ensuring members are aware of their credit union's insurance status.
5. Federal vs. State-Chartered Credit Unions: The distinction between federal and state-chartered credit unions is highlighted. Federal credit unions are regulated and insured by the NCUA, with specific naming requirements. State-chartered credit unions, on the other hand, are regulated by state supervisory authorities and may or may not be insured by the NCUA.
6. Share Insurance Fund Overview: The Share Insurance Fund, backed by the full faith and credit of the United States, ensures that credit union members have never lost a penny of insured savings at federally insured credit unions. The fund is maintained at or near 1.30 percent of federally insured credit union deposits. Federally insured credit unions are required by law to maintain one percent of their deposits in the Share Insurance Fund, with the NCUA Board having the authority to levy a premium if necessary.
7. Share Insurance Toolkit for Credit Unions: The article references a Share Insurance Toolkit for Credit Unions, which contains various resources providing information about NCUA's Share Insurance Fund Program. This toolkit serves as a valuable resource for credit unions seeking guidance on maintaining compliance with insurance requirements.
In summary, the provided article covers crucial aspects of federally insured credit unions, including the NCUA insurance sign requirement, the role of the NCUSIF, distinctions between federally and privately insured credit unions, verification methods for federal insurance, and insights into federal vs. state-chartered credit unions. Additionally, it delves into the Share Insurance Fund and provides credit unions with a toolkit for navigating NCUA's Share Insurance Fund Program.
