Financial Definition of NATIONAL CREDIT UNION ADMINISTRATION

National Credit Union Administration

What It Is

The National Credit Union Administration (NCUA) is an agency of the United States government that charters and oversees federal credit unions. It was created by Congress in 1970.

How It Works

A credit union is a bank-like financial institution that is owned by its depositors. Many corporations and organizations form credit unions for use by their employees. The core functions of the NCUA are to charter these institutions and then oversee them to make sure they are solvent and operated in the best interests of their owners.

Like the Federal Depository Insurance Corporation (FDIC), the NCUA helps maintain the stability of the banking system by insuring deposits. However, the NCUA insures deposits at credit unions, while the FDIC insures deposits at banks. Like the FDIC, the NCUA insures deposits for up to $250,000, but it is important to remember that this coverage is generally for the total of an investor’s deposits at any one institution. Thus the investor is not fully insured if he or she has $150,000 in a checking account and then purchases a $75,000 CD from the same institution, for example. The NCUA insures individual retirement accounts and Keoghs at credit unions for up to $250,000

Why It Matters

The NCUA insures deposits in federal and most state-chartered credit unions via the National Credit Union Share Insurance Fund (NCUSIF). Credit unions that want this insurance must keep 1 percent of their deposits in the NCUSIF. These premiums pay for the operation of the NCUA and are of course kept in reserve in case any claims are made. The NCUSIF is backed by the full faith and credit of the U.S. government, and credit unions that carry this insurance must prominently display the official NCUA insurance sign.

Law Dictionary

National Credit Union Administration

Agency NCUA
  1. independent agency in the executive branch responsible for chartering, insuring, supervising, and examining federal credit unions. The NCUA grants federal credit union charters to groups sharing a common bond of occupation or association, or to groups within a well-defined neighborhood, community, or rural district. It issues policies and regulations, conducts annual examinations, and maintains a warning system designed to identify problems. The National Credit Union Share Insurance Fund insures deposits up to $250,000 in federally insured credit unions.


Financial Definition of NATIONAL CREDIT UNION ADMINISTRATION

National Credit Union Administration

What It Is

The National Credit Union Administration (NCUA) is an agency of the United States government that charters and oversees federal credit unions. It was created by Congress in 1970.

How It Works

A credit union is a bank-like financial institution that is owned by its depositors. Many corporations and organizations form credit unions for use by their employees. The core functions of the NCUA are to charter these institutions and then oversee them to make sure they are solvent and operated in the best interests of their owners.

Like the Federal Depository Insurance Corporation (FDIC), the NCUA helps maintain the stability of the banking system by insuring deposits. However, the NCUA insures deposits at credit unions, while the FDIC insures deposits at banks. Like the FDIC, the NCUA insures deposits for up to $250,000, but it is important to remember that this coverage is generally for the total of an investor’s deposits at any one institution. Thus the investor is not fully insured if he or she has $150,000 in a checking account and then purchases a $75,000 CD from the same institution, for example. The NCUA insures individual retirement accounts and Keoghs at credit unions for up to $250,000

Why It Matters

The NCUA insures deposits in federal and most state-chartered credit unions via the National Credit Union Share Insurance Fund (NCUSIF). Credit unions that want this insurance must keep 1 percent of their deposits in the NCUSIF. These premiums pay for the operation of the NCUA and are of course kept in reserve in case any claims are made. The NCUSIF is backed by the full faith and credit of the U.S. government, and credit unions that carry this insurance must prominently display the official NCUA insurance sign.


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