Protect Your Money: Federal Insurance and the Risks of Payment Apps Skip to content
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Protect Your Money: Federal Insurance and the Risks of Payment Apps

June 15, 2023

In today's digital age, convenience is at our fingertips, and mobile payment apps have become increasingly popular for their ease and speed. However, a recent warning from the Consumer Financial Protection Bureau (CFPB) has shed light on the potential risks associated with storing large sums of money in payment apps that may lack federal insurance. As an advocate for financial security, we at TVFCU want to ensure our members understand the importance of federal insurance and take necessary steps to protect their hard-earned money.

The CFPB's Warning

In a recent announcement, the Consumer Financial Protection Bureau expressed concerns regarding the lack of federal insurance on billions of dollars stored within popular payment apps. This means that if a payment app were to face financial instability or fraud, there might not be a safety net to protect the funds held within the app.

Federal Insurance and TVFCU

Fortunately, for members of TVFCU, there is an added layer of protection. TVFCU is federally insured by the National Credit Union Administration (NCUA), a government agency that ensures deposits in federally insured credit unions. This federal insurance provides peace of mind, safeguarding your funds up to $250,000 per depositor.

Taking Action

To mitigate the risks associated with payment apps lacking federal insurance, it is essential to follow the instructions provided by the CFPB. Here are some recommended steps to protect your funds:

1. Evaluate Your Payment App: Review the terms and conditions of the payment app you use to determine if it provides federal insurance for your funds. If it does not, consider transferring the funds to your federally insured credit union account.

2. Verify Federal Insurance: Ensure that your bank or credit union account is federally insured by the NCUA or the Federal Deposit Insurance Corporation (FDIC). Contact TVFCU or your respective financial institution to confirm the coverage.

3. Transfer Funds to Federally Insured Accounts: If your payment app lacks federal insurance, it is advisable to transfer your funds to your federally insured bank account. This will provide you with the added protection and security that comes with federal insurance.

4. Stay Informed: Keep an eye on any updates or alerts from the CFPB or your financial institution regarding payment app security and federal insurance coverage. It's important to stay informed about any potential risks or changes that may affect your finances.

While payment apps offer convenience and accessibility, it's crucial to be aware of the potential risks associated with storing significant amounts of money in apps without federal insurance. As a TVFCU member, you can take advantage of the NCUA's federal insurance coverage to protect your funds. By following the instructions outlined by the CFPB and transferring your funds into your federally insured credit union account, you can ensure the safety of your hard-earned money. Stay vigilant, stay informed, and make the necessary moves to safeguard your financial well-being.

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