Credit unions across the country contribute proportionately to a federal insurance fund, called the National Credit Union Share Insurance Fund (NCUSIF). It is the credit union version of the banking industry’s Federal Deposit Insurance Corporation (FDIC). Like the FDIC guarantee for bank deposits, the NCUSIF insures credit union members’ savings up to $250,000, with additional coverage up to $250,000 for IRAs.
Taxpayer dollars have never been used to create or replenish the credit union insurance fund. We view our share in the deposit insurance fund as an investment in fiscal responsibility. When earnings bring the fund balance above a certain level, we receive a dividend. When times are harder, we pay into the fund as a reserve to cover potential losses.
History has shown that the NCUSIF has provided the financial guarantee backed by the U.S. government to maintain a healthy credit union industry and to insure members’ savings. The system works even in these tough times.