User:JimMillerJr/Sandbox/NCUSIF draft
From Wikipedia, the free encyclopedia
The National Credit Union Share Insurance Fund(NCUSIF) is administered by the National Credit Union Administration(NCUA) for the purpose of providing deposit insurance to protect deposits of credit union members at insured institutions. It was created in 1970 shortly after the creation of the NCUA as an independant regulator of credit unions in the United States.
[edit] Funding, premiums and dividends
The NCUSIF is funded entirely by deposits from insured credit unions. All Federal credit unions, as well as any state chartered credit union insured by the fund, are required to maintain a balance equalling 1% of all covered deposits in the fund. The NCUA is required to maintain an equity balance of at least 1.2% and no more than 1.3% of the total of insured deposits.
The majority of the fund is invested in United States treasury securities, and a significant portion of the earnings are used to fund the operations of the NCUA. Proceeds from the fund provided 57% of the NCUA operating budget in FY 2006 with the remainder coming from operating fees charged to regulated credit unions.
In the event that the equity ratio of the fund fall below 1.2%, the NCUA will charge a premium to insured credit unions to maintain the required minimum. In years when the fund has acheived a ratio above 1.3%, it will pay out excess funds to insured credit unions in the form of a dividend.
Misc Notes:
Creation
In 1970 Congress approved and President Richard M. Nixon signed Public Law 91-206, creating the National Credit Union Administration as an independent agency. That same year, the President also signed Public Law 91-468 to establish the National Credit Union Share Insurance Fund (NCUSIF) as the safety net for the nation’s credit unions.
In 1970, soon after the NCUA was established, Congress created the National Credit Union Share Insurance Fund, which insures the accounts of federally chartered credit unions and of many state chartered credit unions, and made the NCUA responsible for its administration. 12 U.S.C. §§ 1781-1790(c).
25th Anniversary
President Clinton honored the insurance fund’s 25th Anniversary in a letter, saying, in part, “Providing fair loans, sound fiscal advice, and high quality consumer services to their members, credit unions have earned the trust of their shareholders and the respect of financial institutions throughout our nation.
“The creation of share insurance for credit unions has played a vital role in this success story, helping to guarantee continued stability in the industry and peace of mind for the millions of Americans who rely on these unique financial institutions every day,” the President wrote.
[edit] Important wiki links
Federal Deposit Insurance Reform Act of 2005
[edit] References
- ↑ http://www.ncua.gov/ncuaboard/board_reports/BAB05-1129.pdf
- ↑ Hampel, Bill. ""What Happened to NCUSIF Dividends?"", Credit Union Magazine, October 2002.
