IMPORTANT NOTICE
QUESTIONS MOST FREQUENTLY ASKED ABOUT THE NATIONAL CREDIT UNION SHARE INSURANCE FUND
1 . Which credit unions are insured by NCUSIF?
2. How does NCUSIF share insurance protect credit union members against loss?
3 . Does NCUSIF share insurance protection apply only if a credit union is liquidated?
4. How does NCUSIF pay members their shares when an insured credit union is liquidated?
5 . What happens to the member's share account when an insured credit union is merged into another insured credit union?
6. Does NCUSIF share insurance protect the interest of creditors?
QUESTIONS MOST FREQUENTLY ASKED ABOUT SHARE INSURANCE COVERAGE
7 . What is the Standard Maximum Share Insurance Amount or SMSIA for NCUSIF share insurance coverage?
8. What types of accounts are insured?
9 . Is NCUSIF share insurance coverage increased by placing funds in two or more of the same kind of share accounts in the same credit union?
10. If a member has accounts in several different insured credit unions, will the accounts be added together for the purpose of insurance coverage?
NCUSIF INSURANCE OF INDIVIDUAL AND JOINT ACCOUNTS
11 . If a member has more than one individual account in the same insured credit union, is each account insured to the SMSIA?
12. What types of joint accounts may be insured?
13. 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?
14. Is the answer to question 13 the same if funds in the individual and joint accounts of husband and wife all consist of community property?
NCUSIF INSURANCE OF SPECIAL ACCOUNTS
15 . What is the insurance coverage on a trust account held under the provisions of an irrevocable express trust?
16. What is the insurance coverage on a revocable trust account, a tentative or "Totten" trust account, a "payable-on-death" account, or a qualifying living trust account?
17 . What is the insurance coverage on a joint revocable trust account?
18. Is the interest in an employee benefit account insured any differently than a member's individual account?
19 . May a person receive separate insurance on each of several employee benefit plans established by the member's employer with the same credit union?
20. What insurance coverage is provided for traditional IRA, Roth IRA, and Keogh accounts?
21. Are accounts held by a person as executor, administrator, guardian, custodian, or in some other similar fiduciary capacity insured separately from his individual account?
22. When an account is designated as held by a person as agent for the true owner of the funds, how is the account insured?
23. Is an account held by a corporation, partnership, or unincorporated association insured separately from the individual accounts of the stockholders, partners, or members?
OTHER QUESTIONS
24. Can a federal credit union terminate its NCUSIF share insurance?
25. Can a state credit union terminate its NCUSIF share insurance?
26. What publications covering the operations of the NCUSIF are available?
27. What happens to insured funds that are not claimed by the member at a liquidation payout?
28. Where does a credit union member go for information about his credit union or specific questions about NCUSIF share insurance?
29. What effect does the death of a member or the merger of insured credit unions have on share insurance coverage?

IMPORTANT NOTICE
The information provided below is taken from brochure NCUA 8046 November 2006. That brochure also provides examples of insurance coverage under the National Credit Union Administration's (NCUA) rules. Because the scope of that brochure is limited, members may also wish to contact our office or NCUA for further insurance coverage details about situations not addressed in that brochure. A listing of NCUA Regional Offices can be found in that brochure. Members or their counsel may also wish to consult the NCUA Rules and Regulations relating to share insurance coverage published in the Code of Federal Regulations (12 C.F.R. Part 745). Also, you can find NCUA's insurance regulations at www.ncua.gov.

NCUA's rules on insurance coverage control how accounts will be insured. Members are advised that no persons may, by representations or interpretations, effect the extent of insurance coverage provided by the Federal Credit Union Act as amended and the rules and regulations for insurance of share accounts. Also, members are advised to review their accounts periodically and whenever they open new accounts or modify existing accounts to ensure that all of their funds continue to be insured.
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QUESTIONS MOST FREQUENTLY ASKED ABOUT THE NATIONAL CREDIT UNION SHARE INSURANCE FUND
 
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1 . Which credit unions are insured by NCUSIF?
NCUSIF insures member shares in all federal credit unions (FCU) and those federally insured state-chartered credit unions (FISCU) that apply for and meet the insurance standards. Insured credit unions are required to indicate their insured status in their advertising and to display the official NCUSIF insurance sign at their offices. Some state credit unions are insured by private insurance or guaranty corporations which are separate and apart from NCUSIF.
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2. How does NCUSIF share insurance protect credit union members against loss?
Each credit union approved for NCUSIF share insurance must meet high standards of safety and soundness in its operation. Adherence to these standards is determined regularly through credit union examinations by federal and state examiners. If an insured credit union gets into financial difficulties and must be closed, the NCUSIF acts immediately to protect each member's share account.
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3 . Does NCUSIF share insurance protection apply only if a credit union is liquidated?
No. Liquidation is the only situation in which a member is directly provided share insurance protection by the payment of a check for his or her insured savings. However, indirect protection is provided when the NCUA Board, through the NCUSIF, authorizes financial assistance to a credit union to enable it to overcome a temporary financial setback. In a case where a credit union is unable to overcome its difficulty, financial assistance may be authorized to accomplish a merger that protects the continuing credit union from loss and provides continued credit union service to the members of the merging credit union.
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4. How does NCUSIF pay members their shares when an insured credit union is liquidated?
Checks for each member's shares (less any amounts due on outstanding loans) up to the insurance limit are mailed to the member's last known address as shown in the records of the credit union. These checks are usually mailed several days after the credit union is placed into liquidation. In situations where on-site payment is more convenient, the NCUA liquidation team will give checks directly to members.
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5 . What happens to the member's share account when an insured credit union is merged into another insured credit union?
Each member's share account is transferred to the continuing credit union. Accrued dividend credit is also transferred. On the effective date of the merger, each merging credit union member has full membership rights to all the financial services provided by the continuing credit union.
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6. Does NCUSIF share insurance protect the interest of creditors?
No. NCUSIF share insurance protects only credit union members.
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QUESTIONS MOST FREQUENTLY ASKED ABOUT SHARE INSURANCE COVERAGE
 
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7 . What is the Standard Maximum Share Insurance Amount or SMSIA for NCUSIF share insurance coverage?
The 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.
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8. What types of accounts are insured?
All types of member share accounts and deposits received by the credit union in its usual course of business, including regular shares, share certificates, and share draft accounts are insured. Investment products offered by a credit union to its members, such as mutual funds, annuities, and other non deposit investments are not insured by the NCUSIF.
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9 . Is NCUSIF share insurance coverage increased by placing funds in two or more of the same kind of share accounts in the same credit union?
No. NCUSIF share insurance is not increased merely by dividing funds owned by the same person or persons into one or more of the different kinds of share accounts available. For example, a regular share account, a share draft account and a share certificate account owned by the same member are added together and insured up to the $250,000 SMSIA. Insurance can be increased by opening a different type of account - one that is held in a different right and capacity. For example, insurance on a single ownership account is separate from insurance on a joint account.
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10. If a member has accounts in several different insured credit unions, will the accounts be added together for the purpose of insurance coverage?
No. Share insurance is applied to share accounts in each insured credit union. A member who has share accounts in two or more different insured credit unions would have coverage up to the full insurable amount in each credit union. In the case of a credit union having one or more branches, the main office and all branch offices are considered as one credit union.
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NCUSIF INSURANCE OF INDIVIDUAL AND JOINT ACCOUNTS
 
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11 . If a member has more than one individual account in the same insured credit union, is each account insured to the SMSIA?
No. Individual share accounts held by the same member are added together and are insured up to the $250,000 SMSIA. An individual share account is an account solely owned by one individual without the right of withdrawal by another individual. IRA and Keogh accounts are insured separately.
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12. What types of joint accounts may be insured?
NCUSIF share insurance covers joint accounts owned in any manner conforming with applicable state law such as joint tenants with a right of survivorship, tenants by the entireties, tenants in common, or an account owned by a husband and wife as community property in states recognizing this particular form of joint ownership.
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13. 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?
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. (If state law limits a minor's right of withdrawal, the account will still be insured as a joint account. The signature of each co-owner is not required on a share certificate.). However, the insurance protection for a co-owner on joint accounts is not in creased by rearranging the names of the owners, changing the style of names, or by establishing more than one joint account. The interests that a particular co-owner has in all joint accounts held in the same credit union will be added together and insured up to the $250,000 SMSIA.
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14. Is the answer to question 13 the same if funds in the individual and joint accounts of husband and wife all consist of community property?
Yes. In those jurisdictions recognizing community property, community funds may be maintained in accounts in the individual names of each spouse or a joint account in the names of both. The individual account of the husband and the individual account of the wife will each be insured up to the $250,000 SMSIA. As co-owners, the interest of the husband and wife in the joint account will each be insured up to the $250,000 SMSIA.
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NCUSIF INSURANCE OF SPECIAL ACCOUNTS
 
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15 . What is the insurance coverage on a trust account held under the provisions of an irrevocable express trust?
The trust interest of a beneficiary in a valid irrevocable trust, including Coverdell Education Savings Accounts, formerly Education IRAs, if capable of evaluation in accordance with published rules, is insured up to the $250,000 SMSIA separately from the individual accounts of the settlor (grantor), trustee, or the beneficiary. Either the settlor or the beneficiary must be a member to obtain insurance benefits. All trust interests created by the same settlor (grantor) in the same credit union for the same beneficiary will be added together and insured in the aggregate to the $250,000 SMSIA.
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16. What is the insurance coverage on a revocable trust account, a tentative or "Totten" trust account, a "payable-on-death" account, or a qualifying living trust account?
These accounts, or any similar accounts which evidence an intention that the funds shall pass on the death of the owner to a named beneficiary, are considered revocable trust accounts and are insured as a form of individual account. If the beneficiary is a spouse, child, grandchild, parent, brother or sister (whether through blood, adoption or by virtue of remarriage, such as a step-mother) of the owner, the funds in such accounts are insured for the owner up to a total of the $250,000 SMSIA for each such beneficiary separately from any other individual accounts of the owner. If the beneficiary is not one of those listed relatives, the funds in the account that are attributable to that beneficiary are treated as an individually owned account of the owner, aggregated with any other individual accounts of the owner, and insured to the $250,000 SMSIA. In the case of a revocable trust account, the person who holds the power of revocation is deemed to be the owner of the funds in the account.
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17 . What is the insurance coverage on a joint revocable trust account?
A joint revocable trust account is a revocable trust account, as described above, that is established by more than one owner and held for the benefit of others, some or all of whom are within the described qualifying degree of kinship. The respective interests of each co-owner held for the benefit of each qualifying beneficiary will be separately insured up to the $250,000 SMSIA. The interest of each co-owner will be deemed equal unless otherwise stated in the share account records of the federally-insured credit union. Interests held for non-qualifying beneficiaries will be added to the individual accounts of the co-owners. Where a husband and a wife establish a revocable trust account naming themselves as the sole beneficiaries, the account will not be insured as a joint revocable trust account, but will instead be insured as an ordinary joint account.
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18. Is the interest in an employee benefit account insured any differently than a member's individual account?
Yes. For insurance purposes, employee benefit accounts are insured separately. The ascertainable interest of each participant in such account is insured to the $250,000 SMSIA separately from other accounts.
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19 . May a person receive separate insurance on each of several employee benefit plans established by the member's employer with the same credit union?
No. If two or more employee benefit plans are established by an employer for the same individual, the beneficiary's interest in the two accounts will be added together and insured up to the $250,000 SMSIA.
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20. What insurance coverage is provided for traditional IRA, Roth IRA, and Keogh accounts?
Traditional IRA, Roth IRA and Keogh accounts are insured separately to $250,000 from other accounts that the member maintains in the same credit union. However, a member's Roth IRA will be added together with his or her traditional IRA and insured in the aggregate to the maximum of $250,000. A Keogh account is separately insured from the IRA accounts to $250,000.
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21. Are accounts held by a person as executor, administrator, guardian, custodian, or in some other similar fiduciary capacity insured separately from his individual account?
Yes. If the records of the credit union indicate that the person is depositing the funds in a fiduciary capacity, such funds would be separately insured from the fiduciary's individually owned account. Funds in accounts held by guardians, conservators, or custodians (whether court-appointed or not) are also insured separately from other accounts of the ward.
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22. When an account is designated as held by a person as agent for the true owner of the funds, how is the account insured?
The account is insured as an account of the principal or true owner. The funds in the account are added to any other individual account owned by the true owner and the total is insured up to the $250,000 SMSIA.
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23. Is an account held by a corporation, partnership, or unincorporated association insured separately from the individual accounts of the stockholders, partners, or members?
Yes. If the corporation, partnership, or unincorporated association has obtained membership in the credit union and is engaged in an independent activity, its account is separately insured to the $250,000 SMSIA. The term "independent activity" means an activity other than one directed solely at increasing insurance coverage.
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OTHER QUESTIONS
 
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24. Can a federal credit union terminate its NCUSIF share insurance?
No. A federal credit union cannot be chartered or retain its charter unless it is insured by the NCUSIF.
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25. Can a state credit union terminate its NCUSIF share insurance?
Yes. A state-chartered credit union can terminate its NCUSIF share insurance in some states, but it must obtain the approval of its members and the NCUA Board. In other states, state-chartered credit unions are required to maintain NCUSIF share insurance. NCUSIF share insurance is the only share insurance backed by the full faith and credit of the United States Government. When a state credit union converts its NCUSIF share insurance to another licensed share insurance program, NCUSIF share insurance terminates upon conversion. If the state credit union does not provide for another share insurance program, NCUSIF share insurance remains in effect for one year following the effective date of termination, but coverage may be reduced depending upon account activity during the one year period.
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26. What publications covering the operations of the NCUSIF are available?
NCUA publishes an Annual Report which covers the operations of the NCUSIF. This report is sent to each insured credit union and is also available from each regional director. The report includes financial statements and an independent audit of the Fund's records.
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27. What happens to insured funds that are not claimed by the member at a liquidation payout?
At the end of the 18-month insurance period, unclaimed funds are no longer insured, and share account balances are paid based on liquidation and other recoveries. The funds are generally held by NCUA and are available as long as the records of the credit union are available or until the charter or insurance certificate is canceled. In some cases funds may be transferred to a state unclaimed property section for a period of time.
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28. Where does a credit union member go for information about his credit union or specific questions about NCUSIF share insurance?
The member should first contact the credit union for the needed information. Credit union personnel, however, cannot bind the NCUSIF to provide more protection than is allowed under the Federal Credit Union Act or NCUA Regulations. They will be able to obtain information for you from NCUA. If the credit union cannot provide the information or is no longer in operation, the member should contact the appropriate regional director directly. The address of each regional director and the states in which he/she has supervisory jurisdiction are listed in the back of this brochure.
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29. What effect does the death of a member or the merger of insured credit unions have on share insurance coverage?
The death of a member will not affect the member's share insurance coverage for a period of six months following death unless the member's share accounts are restructured in that time period. If the accounts are restructured during the six-month grace period or upon the expiration of the six months if not restructured, the share insurance coverage will be provided on the basis of actual ownership of the accounts in accordance with the share insurance rules. The operation of this grace period, however, will not result in a reduction of coverage.

Whenever the liability to pay the member accounts of one or more insured credit unions is assumed by another insured credit union, whether by merger, consolidation, other statutory assumption or contract, the insured status of the credit unions whose member account liability has been assumed terminates on the date of receipt by NCUA of satisfactory evidence of the assumption. The separate insurance of member accounts assumed continues for six months from the date the assumption takes effect or, possibly longer in the case of share certificates.
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