What Is the National Credit Union Administration (NCUA)?
The National Credit Union Administration (NCUA) is an agency of the United States federal government. The federal government created the to monitor federal credit unions across the country.Key Takeaways
- Credit unions and banks offer similar financial products, like mortgages, auto loans, and savings accounts, but credit unions are not-for-profit institutions, unlike banks.
- The National Credit Union Administration (NCUA) oversees the quality and operations of thousands of federal credit unions.
- The Federal Deposit Insurance Corporation (FDIC) is the equivalent of the NCUA for banks.
Understanding the National Credit Union Administration (NCUA)
The NCUA is a federal agency founded in 1970 and headquartered in Alexandria, Virginia. A three-member board heads the agency, all of whom are appointed directly by the president of the United States. The agency currently monitors over 9,500 federally insured credit unions that service over 80 million customer accounts.The NCUA runs the National Credit Union Share Insurance Fund (NCUSIF), which is one of the agency’s most massive responsibilities. The NCUSIF uses tax dollars to insure the deposits at all federal credit unions. Most NCUA insured institutions are federal and state-chartered credit unions and savings banks. Accounts insured in NCUA insured institutions are savings, share drafts or checking, money markets, share certificates or CDs, Individual Retirement Accounts, and Revocable Trust Accounts.
The National Credit Union Administration vs. the Federal Deposit Insurance Corporation
The NCUA is equivalent to the Federal Deposit Insurance Corporation or FDIC. The FDIC is an independent federal agency that insures deposits in U.S. banks in the event of bank failures. Created in 1933 in response to the Great Depression, the FDIC maintains public confidence and encourages stability in the financial system through the promotion of sound banking practices.
The significant difference between the FDIC and the NCUA is the former deals only with credit institutions, and the latter uses the National Credit Union Share Insurance Fund; the FDIC uses the Deposit Insurance Fund.