NCUA Insurance Coverage
Section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act
(DFA) included a temporary provision for unlimited federal share insurance
coverage on all amounts held in noninterest-bearing transaction accounts in
federally insured credit unions. This coverage expired on December 31, 2012.
Generally, the DFA defines noninterest-bearing transaction accounts to include
traditional, noninterest-bearing demand deposit accounts—such as share draft
accounts—that allow for unlimited deposits and withdrawals at any time. This
does not include NOW accounts, money-market accounts, or interest on lawyers
trust accounts (IOLTA). This provision, among others, in the DFA was intended to
ensure liquidity and enhance confidence in the banking system during the recent
Effective January 1, 2013, NCUA will no longer insure noninterest-bearing
transaction accounts separately from other accounts or in excess of the standard
$250,000 share insurance amount. In other words, noninterest-bearing transaction
accounts will be subject to the same insurance coverage levels as all other
share accounts in a credit union.