Conservatorship: From time to time, the National Credit Union Administration places a credit union into conservatorship in order to resolve operational problems that could affect that credit union’s safety and soundness. Conservatorship means the NCUA has taken control of the credit union. During a conservatorship, the credit union remains open; members may transact business; and accounts remain insured by the National Credit Union Share Insurance Fund. For federally chartered credit unions, the NCUA takes this action on its own; in the case of a state-chartered credit union, the state supervisory authority initiates the conservatorship and in many cases appoints the NCUA as agent for the conservator.
Conservatorships can have three outcomes:
- The credit union can resolve its operational problems and be returned to member ownership;
- The credit union can merge with another credit union; or
- The NCUA can liquidate the credit union.
Liquidation: Liquidation means a credit union has been closed; however, a liquidated credit union may be purchased—and members, assets, and loans assumed—by another credit union, so that members will be able to continue receiving financial services. If a credit union is liquidated and is not purchased by another credit union, the NCUA’s Asset Management and Assistance Center will oversee the liquidation, manage assets, settle members’ insurance claims, and attempt to recover value from the closed credit union’s assets. All verified member shares are typically paid within five days of a credit union’s closure.
No member of a federally insured credit union has ever lost a penny in insured accounts.