PALM BEACH GARDENS, Fla.--Make sure you keep bank and credit union account statements and deposit records, because they may prove essential for the quick collection of deposit insurance due to you if your bank or credit union is liquidated.

This issue came to light in the July 28 liquidation of New London Security Federal Credit Union. While credit unions generally invest in loans, that credit union reported more than 90% of its $12.7 million in assets were in held-to-maturity securities. The situation is under investigation by the Connecticut attorney general's office and the National Credit Union Administration.

About one month after the liquidation, the NCUA reported that more than 97% of the credit union's accounts -- 602 of 618 -- received full payment.

"The remaining accounts are still being reviewed, or have deposits in excess of the $100,000 federal insurance limit for individual accounts," NCUA said.

One reason NCUA is still reviewing accounts is that New London Security Federal Credit Union is one of 104 credit unions lacking computerized records. Due to the lack of computerization, the NCUA had to go in and reconstruct records.

When asked how many FDIC-insured banks lack computerized records, FDIC spokesman David Barr said, "We don't track that type of information, so we'd have to poll our banks."

Connecticut Attorney General Richard Blumenthal said that credit union members who contacted his office regarding the New London case were properly reimbursed. He did not know, though, if that covered all affected credit union members.

Reimbursing those members took weeks, he added.

Indeed, as NCUA statements on credit union liquidations have indicated, checks are issued to individuals who hold "verified" share accounts.

That's also true for reimbursements for accounts held at the 163 credit unions insured by American Share Insurance, in Dublin, Ohio: If a credit union is liquidated, reimbursements are subject to verification.

"We have to confirm balances," said Dennis Adams, president of ASI, provider of primary and excess insurance up to $250,000 per credit union account in a number of states.

ASI had 10 or 15 liquidations out of 115 failures in the last 22 years, Adams says. "We have never had the problem that we weren't able to validate balances."

What to do

What should you be doing to protect your deposits and share accounts in these turbulent times? In addition to holding on to your paperwork to improve your chances of verifying account balances, consider the following tips:

1. Make sure your deposit or share accounts are fully covered by insurance. As of June 30, $76.3 billion at credit unions nationally was not covered by federal insurance, said Cherie Umbel, NCUA spokeswoman.

"We have no way of distinguishing what amounts in this total are attributable to a lack of consumer knowledge, a conscious and informed consumer choice, or reporting errors. However we are initiating educational initiatives to improve consumer awareness and minimize future computational errors," she said.

You can check the extent of your federal insurance coverage at MyFDICinsurance.gov for banks and savings institutions, and at NCUA.gov for credit unions. While both the FDIC and NCUA insure per depositor, American Share Insurance insures per share account.

2. Beware that some types of accounts are not covered by insurance. Those include securities, such as stocks, bonds, mutual funds, and some annuities.

3. Understand the insurance your bank or credit union has. It's rare, but a few may have none. The Financial Services Regulatory Relief Act of 2006 sets basic requirements for institutions to disclose that they are not federally insured. Although the rules are enforceable by states and by the Federal Trade Commission, the FTC has not yet clarified the manner and content of the disclosures, said FTC spokesman Frank Dorman "I'm not sure when that will happen," he said. You can check your bank's status at FDIC.gov and your credit union at NCUA.gov.

4. Confirm that your bank or credit union is keeping responsible records, Blumenthal said. Don't hesitate to write your bank or credit union to find out how they're doing this. Consider asking the financial institution's regulator to inspect your financial institution's record-keeping.

5. Guard against the potential for money mismanagement by your bank, savings institution or credit union by keeping abreast of business decisions. Understand whether your institution holds annual meetings and consider attending. Determine whether there are any "periodic points of access to administrators," Blumenthal said. "Ask questions."

6. Understand limits of insurance coverage. The FDIC and NCUSIF (National Credit Union Share Insurance Fund), for example, typically only cover institution failures, not losses due to fraud.