This blog post summarizes the NCUA's share insurance webinar, covering essential topics such as account types, insurance calculations, and the implications of beneficiaries on coverage. It provides a comprehensive overview of how share insurance works for credit union members, ensuring their deposits are protected.
Good afternoon and thank you for joining us for today's NCUA share insurance webinar. I am Ron Goode, an instructional system specialist in the office of Credit Union Resources and Expansion at the NCUA. This webinar aims to provide an informative and educational summary of general information on share insurance.
Before we dive into the content, here are a few administrative announcements:
The materials presented in this webinar are intended for educational purposes only. The NCUA does not guarantee the accuracy or completeness of the information provided and does not offer legal advice.
Today's agenda includes:
We began with a polling question regarding the asset size of the participants' credit unions. The responses indicated a diverse range of asset sizes, highlighting the relevance of this topic for all credit unions.
Jean Marie Komyathy emphasized the NCUA's commitment to protecting credit union members' deposits. Share insurance is a crucial aspect of this mission, ensuring that members' funds are safeguarded against credit union failures.
Sheila Snock and Leilani Stamper, both consumer access program officers with extensive experience at the NCUA, provided insights into share insurance coverage.
Leilani Stamper shared a brief history of the share insurance fund, established by Congress in 1970 to protect credit union members against losses from credit union failures. The insurance limit has increased from $20,000 to $250,000, and the fund has never lost a penny of members' money.
The webinar discussed various account ownership types:
Participants learned about different account types, including share accounts, share draft accounts, money market accounts, club accounts, and share certificates, all of which are aggregated for insurance purposes.
Sheila explained that for insurance purposes, coverage is determined by account ownership and type. For example, a joint account held by two individuals would be insured up to $500,000.
Revocable trust accounts can be more complex. They can be formal (established by an attorney) or informal (created by naming beneficiaries). Both types are insured separately, with specific rules for calculating coverage based on the number of beneficiaries.
Retirement accounts like Traditional IRAs and Roth IRAs are aggregated for insurance coverage, with a limit of $250,000. However, naming beneficiaries does not increase the coverage limit.
Business accounts are insured separately if the corporation or partnership is a member of the credit union and engaged in independent activities.
Throughout the webinar, several polling questions were posed to engage the audience and reinforce learning. For example, participants were asked whether naming a beneficiary on an IRA increases insurance coverage, with the correct answer being false.
Leilani clarified that for revocable trust accounts, all owners must be members of the credit union to receive full insurance coverage. This differs from joint accounts, where only one co-owner needs to be a member.
The presenters defined key terms related to trusts and beneficiaries, emphasizing that all living persons and recognized charities can be beneficiaries, but pets cannot.
The webinar addressed what happens to share insurance coverage after an owner's death. Coverage remains unaffected for six months, allowing time for account restructuring.
In the event of a credit union merger, members have insurance coverage for six months after the merger date, with specific rules for share certificates.
The NCUA provides various resources on their website, including a share insurance estimator tool, instructional videos, and brochures available in multiple languages.
The webinar concluded with a Q&A session, addressing numerous questions from participants about share insurance coverage, beneficiaries, and account types. The NCUA encourages members to utilize their resources for further information and assistance.
Thank you for joining us today, and we hope this summary helps clarify the important aspects of share insurance for credit union members.
