Credit Union Deposit Insurance – FAQs About the NCUA

Credit Union Deposit Insurance – FAQs About the NCUA

The National Credit Union Administration is a government-backed insurer of credit unions in the United States. It is one of two agencies in the country that offer deposit insurance to its members. The NCUA helps credit unions survive financial storms by providing them with capital and a network of professionals to assist with your accounts. If you have questions about the agency, here are some frequently asked questions. Also, learn about the agency’s mission and its regulations through this link

The National Credit Union Administration is an independent federal agency whose board members are appointed by the president and confirmed by the Senate. The board is non-political, yet they are charged with the important job of ensuring the health of the credit union system. The NCUA regulates and insures federal credit unions. As a member of the Federal Financial Institutions Examination Council, NCUA is responsible for ensuring that all U.S. financial institutions accept deposits, and it oversees the NCUSIF.

However, it’s important to note that supervisory guidance is not regulation, and NCUA will not criticize a supervised financial institution for not complying with its guidance. Supervisory guidance documents are meant to provide examples of safe conduct, appropriate risk management, and appropriate consumer protection. The NCUA will seek public comment before issuing any regulation. Further, NCUA will strive to limit the number of supervisory guidance documents issued in the future and encourage supervised institutions to seek consultation with their agency’s staff if they have any questions about an issue.

The NCUA Board adopts rules that govern the conduct and content of its meetings. The Board publishes notices of proposed rulemaking every two years. Interested persons may submit written comments within the timeframes specified in the notice. Comments must be submitted to the Secretary of the Board, at 1775 Duke Street, Alexandria, VA 22304. Alternatively, interested parties may petition the NCUA Board to consider a proposed rule. However, petitions must be submitted to the NCUA Board Secretary.

The National Credit Union Administration (NCUA) oversees the quality of federal credit unions. Unlike banks, credit unions are nonprofit cooperative financial institutions that rely on member deposits for loan creation. NCUA is the regulating body for credit unions and also operates the National Credit Union Share Insurance Fund, which insures the savings of account holders in federal credit unions. NCUA also provides financial literacy tools and resources for members. Its guides and publications provide information on how to start a new credit union.

The NCUA’s Share Insurance Fund contains approximately $13 billion in capital. Of this, $2.8 billion is retained earnings and $10 billion is contributed capital from state-chartered and federal credit unions. Under the Federal Credit Union Act, the NCUA Board has to set a target equity ratio for the Share Insurance Fund. This policy is based on the normal operating equity ratio of 1.30 percent. This means that if your institution has a low equity ratio, you should expect to pay a premium for that account.

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