What Is the National Credit Union Administration (NCUA)?

While most people are familiar with banks and how they work, credit unions can be more of a mystery. However, banks and credit unions share many similarities. In both cases, for example, the federal government protects the money you deposit at federally-backed institutions.

Accounts at federal credit unions aren’t protected by the FDIC, though. That responsibility lies with another federal agency: the National Credit Union Administration (NCUA). Here’s a closer look at the NCUA and its role in protecting consumers, as well as tips on determining if your credit union is a member.

What Is the National Credit Union Administration?

The National Credit Union Administration (NCUA) is an independent federal agency created by Congress in 1970 to regulate all federal credit unions. The NCUA fills a similar role with credit unions that the FDIC does with banks.

Congress designed the NCUA to protect credit unions and its members. There are four main functions of the NCUA:

• Charter federal credit unions
• Create and maintain regulations regarding credit unions
• Monitor credit union activities
• Insure deposits made at federal credit unions

The NCUA is overseen by a three-person Board of Directors, all of which are appointed by the president of the United States and confirmed by the U.S. Senate. The president also designates a chairman of the Board of Directors.

NCUA at a Glance

• Created by the U.S. Congress in 1970
• An independent federal agency
• Insures federal credit union deposits up to $250,000 per depositor, per institution, through the National Credit Union Share Insurance Fund
• Oversees more than 9,500 federally chartered credit unions in the U.S.
• Headquarters in Alexandria, Virginia, with regional offices in Austin, Texas and Tempe, Arizona.

Types of Accounts Insured

Many kinds of accounts are protected if the federal credit union you bank with ceases operation. Here’s a list of credit union accounts that are protected by the NCUA:

• Savings accounts
• Checking accounts
• Money market accounts
• Joint accounts
• Trusts
• Traditional and Roth IRAs
• Keogh (retirement) plans

Not all account types are insured by the NCUA, though. Mutual funds, stocks, bonds, and life insurance policies are not covered by the NCUA.

NCUA Coverage Amounts

As with bank accounts insured by the FDIC, money that you keep at federally backed credit unions is insured up to $250,000 per depositor, per institution, by the NCUA. Keep in mind that this amount is the combined total of all accounts at an institution, not each individual account.

Joint accounts come with twice the protection, with insurance up to $250,000 per account owner. Coverage for both formal and informal revocable trusts is up to $250,000 per beneficiary, for each owner. Trust accounts with balances of more than $1.25 million have their own rules.

What Is the National Credit Union Share Insurance Fund?

When Congress created the NCUA, it established the National Credit Union Share Insurance Fund to protect deposits made to credit unions. At its inception, this fund only insured deposits up to $20,000 at federally insured credit unions. Now, the fund offers much more protection for credit union members, up to $250,000 per depositor, per institution.

The National Credit Union Share Insurance Fund has the backing of the federal government. The NCUA also insures many state-chartered credit unions.

How to Know if Your Credit Union Is Federally Insured

There are a few ways you can determine if your credit union is a member of the NCUA. First, all federally insured credit unions are required to display the official NCUA insurance sign in several places, such as below each teller station and anywhere else that deposits are received. Credit unions must also display the official sign on any of its websites.

You can also check if your credit union is a member by using the NCUA’s credit union locator. To learn more about a specific credit union, use their credit union research tool.

How to File a Complaint With the NCUA

Credit union members have rights and options if they find themselves in a dispute with their credit union. If you can’t resolve the issue directly with the credit union, you can file a complaint through the NCUA Consumer Assistance Center. Members can file a complaint two ways:

• Download and submit one of the NCUA’s two complaint forms
• File a complaint through the online portal

Using the online portal allows consumers to track their complaint and upload any related documentation.

You can also get help from the NCUA’s Consumer Assistance Center by calling (800) 755-1030. Phone support is available Monday through Friday, 8 a.m. to 5 p.m. (EST).

What’s the Difference Between a Credit Union and a Bank?

The main difference between banks and credit unions is that credit unions are not-for-profit organizations and banks are for-profit. Credit unions are also member-owned, which means you must be a member to use a credit union’s services. Members vote for a volunteer board of directors that manages the credit union.

Because they are non-profits, credit unions often use the money they make to pass savings to their members through things like lower fees, higher earned interest, and discounted loan rates.

What’s the Difference Between the FDIC and the NCUA?

The FDIC regulates and insures banks while the NCUA regulates and insures credit unions. Both federal agencies insure select consumer accounts up to $250,000 per depositor, per institution.

How Do I Become a Member of a Credit Union?

Each credit union has its own membership requirements that vary depending on its structure. Many credit unions require certain conditions be met to become a member, such as having a specific employer, being a member of a group or association, or living in a certain area.

How Much Does It Cost to Become a Member of a Credit Union?

Most credit unions charge a fee to join, usually between $5 and $25.

Should I Use a Credit Union Instead of a Bank?

Both credit unions and banks offer consumers banking solutions for saving and borrowing. Most banks and credit unions are backed by the federal government and insure your money up to $250,000 per depositor, per institution. Whether you choose a credit union or a bank is a matter of preference. Banks might offer a broader range of products than at a credit union. But since they are non-profit organizations, credit unions sometimes offer better interest rates, lower rates on loans, lower fees, and excellent customer service.

When deciding where to bank, think about the products and services that are most important to you and search for an institution that meets your needs. No matter your decision, it is often a good idea to pick one that is federally insured.