NCUA Publicly Confirms Reciprocal Deposits are Permissible for Federally Insured Credit Unions
On March 18th 2026, the National Credit Union Administration (NCUA) publicly confirmed that reciprocal deposits are permissible for federally insured credit unions (FICUs), as long as the program is conducted both safely and soundly. The release, published in the NCUA's Brokered and Reciprocal Deposits FAQ, marks the first time the regulator has publicly addressed the availability of reciprocal deposit networks for credit unions, validating what ModernFi CUSO has advocated for and built on behalf of the credit union community.
A Historic Moment for Credit Unions
Before this guidance, the 4,000+ credit unions across the United States had no formal public regulatory framework confirming access to reciprocal deposit programs and the benefits they provide. ModernFi CUSO brought the first reciprocal deposit network to the credit union ecosystem in 2024 and prior to this, credit unions and their members with balances above standard NCUA insurance limits, including businesses, nonprofits, and public entities, had limited options. The work of ModernFi CUSO and the acknowledgement from the NCUA mark a major milestone in the ability for credit unions to better serve high value member relationships.
The below language is taken directly from the NCUA FAQ and highlights the permissibility for credit unions and how both low-income designated (LID) and non-LID credit unions can leverage reciprocal deposits.
Are reciprocal deposits permissible for FICUs?
Yes, as long as the program is conducted both safely and soundly.
On low-income designated credit unions:
Low-income designated (LID) credit unions tend to have the most flexibility when it comes to accepting reciprocal deposits, because the designation provides them with the latitude to accept a larger category of nonmember deposits.
On non-LID credit unions:
Without a LID or other exception to the general membership requirement, any deposits received by the FICU must come from a source that qualifies for, and obtains, membership at the receiving FICU for the reciprocal deposit to be eligible for NCUA share insurance coverage.
For non-LID credit unions, this confirms a clear path to participation: funds must be memberized through the network. This is precisely the structure ModernFi CUSO has built and is supporting with many of its non-LID partners in its network. The NCUA's guidance is consistent with the framework ModernFi CUSO recommended.
"For the first time, credit unions have public regulatory guidance confirming what we have always believed: reciprocal deposit networks belong in the credit union ecosystem. This is a win for every credit union that has been trying to grow deposits and serve members with larger balances, and for the members themselves looking to work with their local credit union."
Jeff Kline, Former CEO of Circuit and ModernFi CUSO Board Advisor
This regulatory milestone is an affirmation of the work done alongside credit union partners, regulators, and the broader cooperative movement to expand what credit unions can offer their members. ModernFi CUSO will continue working to help credit unions put this guidance into practice.
About ModernFi CUSO
ModernFi CUSO is a credit union service organization built to help federally insured credit unions grow deposits, serve members with larger balances, and access reciprocal deposit networks that were previously unavailable to the credit union community. Working alongside credit unions as a partner, ModernFi CUSO helps institutions ranging from $18 million to $20 billion in total assets compete for business deposits, retain public entity funds, and deliver expanded coverage options to their members. Credit unions working with ModernFi CUSO span the country, serving members across communities of all sizes and asset ranges.
Insurance provided through program credit unions (subject to certain conditions). ModernFi, Inc., ModernFi Deposit Services LLC, and ModernFi CUSO LLC are not NCUA-insured credit unions. Deposit insurance covers the failure of an insured credit union, not ModernFi or ModernFi CUSO. Deposits are placed at insured network institutions and are eligible for pass-through insurance up to $250,000 per institution. Certain conditions must be satisfied for pass-through NCUA deposit insurance coverage to apply. A list of participating credit unions appears at https://www.modernfi.com/credit-union-list.
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