What Is the Difference Between Regular Credit Unions & Federally Backed Credit Unions?

Almost all states require credit unions to insure member accounts.

Credit unions are chartered by either state governments or the federal government. When people refer to a "regular" credit union, it is generally a state-chartered institution and does not have the word "federal" in its name.

State Credit Unions

State laws govern state, or regular, credit unions. State credit unions have to report to the state's credit union regulator.

Federal Credit Unions

The Federal Credit Union Act (FCUA) governs federal credit unions. Federal credit unions have to report to the board of the National Credit Union Administration (NCUA).

Insurance

The NCUA insures credit union customer accounts, in much the same way the Federal Deposit Insurance Corp. (FDIC) insures bank accounts up to a certain amount. All federal credit unions must insure their customer accounts through the NCUA. State credit unions that federally insure customer accounts through the NCUA must also report to the NCUA in addition to reporting to state regulators.

References

• Washington Department of Financial Institutions: Converting Your Credit Union to a Federal or State Charter
• NCUA: The Federal Credit Union Act