Shares
Credit unions drive growth by attracting and retaining member shares. Shares allow a credit union to sustain operations by providing funding for loans and investments, as well as to grow operations, supporting economies of scale and offering additional products and services to meet members’ needs.
Share accounts are generally only available to individuals who qualify for a credit union’s field of membership. Qualified members can open personal share accounts or, if a credit union offers them, business accounts.
A credit union may offer nonmember share accounts to another credit union or a government agency or entity, subject to regulatory limits (NCUA regulation § 701.32(b), Limitations). LID credit unions are also subject to the regulatory limits, but can accept deposits from any nonmember source.
Credit union share accounts generally function like deposit accounts offered by other types of financial institutions, but share accounts also typically represent an ownership stake in a credit union. Each member has one vote regardless of the number of shares (regular, vacation, Christmas, etc.) on deposit. Ownership entitles a member to vote for a credit union’s board of directors and to receive dividends based on board-approved rates.
Member share accounts are generally a credit union’s primary source of funds.
Member shares are typically the largest liability on a credit union’s balance sheet, and are a significant source of potential IRR and liquidity risk. While shares function as a liability under GAAP, they are classified as equity by some state regulators.
This section of the Examiner's Guide addresses the following areas:
Last updated on TBD
