The wave of closing and failed financial institutions including Credit Unions during the 1980s, resulted in the passing of the Financial Institutions Reform Recovery & Enforcement Act of 1989. When a credit union with federal insurance is liquidated, the National Credit Union Administration (NCUA)'s Asset Management and Assistance Center (AMAC) is responsible for paying the share accounts to the members Funds at both federal credit unions and state-chartered credit unions are insured by the National Credit Union Share Insurance Fund (NCUIF) founded in 1970..
Invariably, some shares remain unclaimed. Some checks were never cashed or the credit union's memeber's address information is incomplete. There are also cases when the NCUA doesn't have a recent address and unable to obtain a forwarding address from the post office.
Share accounts claimed within the 18-month insurance period are paid at their full amount up to $100,000 by the NCUSIF. At the expiration of the 18-month insurance period, shares that are not claimed are considered to be uninsured. Even if shares are considered to be uninsured when claimed, there may still be a distribution.
On rare occasions the liquidation of a credit union may result in surplus funds. If a surplus remains, a distribution to the shareholders is required. This may occur years after the credit union is liquidated and therefore makes it more difficult for the NCUA to locate these share holders.
Even if credit union passbook has been lost or destroyed, one may still be able to recover these unclaimed monies. However, there may be a time limit to recover unclaimed shares if the credit union failed and was liquidated so it is prudent to act promptly.
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