Is My Money Safe At My Credit Union?

Recently, our economy has witnessed serious declines in the mortgage and credit markets. This has had an adverse affect on the balance sheets of a number of financial institutions across the nation. While our nation's credit unions have not been active players in making the types of loans that have led to many of these difficulties, they are not immune to the ripples in the financial waters.

As a result of recent developments, Louisiana FCU has compiled a series of Questions and Answers commonly asked by members:

Q: Is my money safe at a credit union?
A: Yes. The National Credit Union Administration (NCUA) is the federal agency that administers the National Credit Union Share Insurance Fund (NCUSIF). The NCUSIF is a federal insurance fund backed by the full faith and credit of the U.S. Government - just like the FDIC.

Q: Is my money safe at Louisiana Federal Credit Union?
A: Yes. Louisiana FCU has been in business since 1935 and has always been insured by the NCUA. The Credit Union cannot exist without this coverage and protection for the members. No one has ever lost a penny of federally insured savings in a credit union. As not-for-profit cooperatives, owned and run for the benefit of members, credit unions have never been pressured to make risky investments. And deposits are federally insured to at least $250,000.

Q: The media says that my funds are not safe if my bank is not FDIC-insured. What about my credit union?
A: The media has focused largely on banks and has rarely mentioned credit unions in their coverage. This has caused many members to question whether or not their funds are secure with their credit union. Just like banks have the FDIC, credit unions are insured by the NCUA, a federal agency backed by the full faith and credit of the US government.

Q: How much is my money insured for?
A: The Standard Maximum Share Insurance Amount (SMSIA) for a credit union member is defined in NCUA’s Rules and Regulations, as $250,000 and may be increased from time to time. Share accounts maintained in different rights or capacities, or forms of ownership, may each be separately insured up to the $250,000 SMSIA, or in the case of certain retirement accounts, up to $250,000. Thus, a member may hold or have an interest in more than one separately insured share account in the same insured credit union. More information on how your accounts are covered can be found in the NCUA’s Insured Funds brochure.

Q: If two or more persons, such as husband and wife, have a joint account in the same credit union as well as their own individual accounts, is each account separately insured?
A: Yes. A person’s interests in joint accounts are insured separately from individual accounts up to the $250,000 SMSIA, provided that each of the co-owners has personally signed an account signature card and has a right of withdrawal on the same basis as the other co-owners. More information on how your accounts are covered can be found in the NCUA’s Insured Funds brochure.

Q: Can the Credit Union cancel the NCUA insurance and leave my money uninsured?
A: No. A federal credit union cannot retain its charter unless it is insured by the NCUSIF.

Q: Has the Credit Union stopped making loans?
A: No. Louisiana FCU has continued its regular operations even amidst the current economic situation.

For information on how your funds are insured, click here for the revised NCUA’s Your Insured Funds brochure.