When it comes to choosing between a bank or a credit union, one of the factors that often sways people in favour of the larger banks is that it is well known that banks are well regulated and therefore investors can be certain that their money is in safe hands, and should anything go wrong they will be well protected. Some people are under the misconception that credit unions are unregulated, however this is certainly not the case. No matter which country you live in, credit unions are regulated by an authorised body to ensure that members’ money is safe.

Who Regulates Credit Unions In The USA?

In the USA, it isn’t the Federal Reserve that regulates and supervises credit unions. Instead, there are two regulatory bodies which supervise their actions. For state chartered credit unions, regulation is at a state level, whereas all credit unions which are federally chartered are under the regulation of the NCUA (National Credit Union administration).

What Is The NCUA?

us credit union regulator

The NCUA or, to give it its full name, the National Credit Union administration, is an independent Federal Agency which has been set up by the US Congress to charter, supervise and regulate all federal credit unions. The NCUA has the full backing of the United States Government and is responsible for all operation and management of the National Credit Union Share Insurance Fund.

This fund insures all of the deposits which have been made by the account holders across every federal credit union and most credit unions which are state chartered too. In total, they insure over 111 million accounts. To get some idea of the figures, there are around 5,500 credit unions which are federally insured, and their combined assets total over $1.38 trillion.

Who Regulates UK Credit Unions?

us credit union regulator

In the UK, all credit unions have dual regulation. This means that there are two organisations which have responsibility for regulating their activities – the FCA (or Financial Conduct Authority) and the PRA (Prudential Regulation Authority). These organisations are exactly the same ones as are responsible for supervising the UK’s building societies and banks.

What Do The FCA And PRA Do?

The PRA (Prudential Regulation Authority) is the UK’s lead regulator which it comes to credit unions, and they hold all responsibility for authorising new credit unions to operate and offer services to the public. As part of the regulation process, all credit unions are required to submit their financial reports on a regular basis as well as to meet with a set of strict rules and requirements. All of the key staff members employed by a credit union as well as all elected volunteers who have an involvement in the running of the operation must also have received approval from the regulators.

As you can see, in both the USA and the UK, credit unions are a safe choice for the provision of financial services since they are well supervised and regulated by reliable and fully authorised bodies. There is therefore no cause for concern.