Safety of Credit Unions
Your deposits in most credit unions are considered to be safe, largely because they are backed by the National Credit Union Share Insurance Fund (NCUSIF). The NCUSIF, which has the full financial backing of the U.S. government, insures individual accounts in all federal credit unions and most state-chartered credit unions.
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Account Protection
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Accounts in federal credit unions and most state-chartered credit unions are guaranteed to at least $250,000. According to the National Credit Union Administration the protection was raised from $100,000 after President Barack Obama signed the "Helping Families Save Their Homes Act of 2009" into law on May 20, 2009. Under the provisions of the law, the increase to $250,000 is to remain in place until at least December 31, 2013.
Transparency
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Credit union members are entitled to detailed financial information regarding the performance of their credit union, according to the financial website Bankrate.com. The site encourages credit union members to request financial memorandums or the most recent financial statements from the credit union itself.
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Regulation
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Credit unions are also regulated by the National Credit Union Administration (NCUA) and by state agencies. The NCUA is also responsible for overseeing the safety and soundness of all credit unions. Through its monitoring process the NCUA identifies credit unions requiring special supervisory attention or concern.
Same Vulnerability as Banks
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Although most credit union accounts are protected by the NCUSIF, the credit unions themselves are still subject to failure, just as banks are.
Seal of Approval
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Credit unions that are insured by the NCUSIF must display an official NCUA insurance sign in their office.
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