National Credit Union Administration
From Wikipedia, the free encyclopedia
The National Credit Union Administration (NCUA) is the United States independent federal agency that supervises and charters federal credit unions and insures savings in federal and most state-chartered credit unions across the country through the National Credit Union Share Insurance Fund (NCUSIF), a federal fund backed by the full faith and credit of the United States government.
As of December 31, 2005, there were 8,695 federally insured credit unions with 84.8 million members had assets of $678.7 billion and loans of $458.3 billion.[1]
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[edit] Origins
The chartering of credit unions in all states is owed to the signing of the Federal Credit Union Act by President Franklin Delano Roosevelt in 1934 as part of the New Deal to help rejuvenate the economy after the Great Depression. The federal law sought to make credit available and promote thrift through a national system of nonprofit, cooperative credit unions.
At first the newly created Bureau of Federal Credit Unions was housed at the Farm Credit Administration. Responsibility of regulation would shift over the years as the agency migrated from the FDIC to the Federal Security Agency, then to the Department of Health, Education, and Welfare.
In the ‘40s and ‘50s credit unions grew steadily - reaching a membership of more than six million people by 1960 - at over 10,000 federal credit unions.
[edit] 1970s - Growth Prompts Change
The great growth resulted in an overhauling of the Bureau of Federal Credit Unions to form the modern independent federal agency that regulates under the present day title.
In 1970, the renaming to National Credit Union Administration was made possible by the creation of the National Credit Union Share Insurance Fund (NCUSIF) to insure credit union deposits. The NCUSIF was created without any tax dollars, capitalized solely by credit unions.
By 1977, services available to credit union members expanded, including share certificates and mortgage lending. In 1979, a three-member Board replaced the NCUA administrator. Congress added the finishing touches to this new administration by the addition of the Central Liquidity Facility, the lender of last resort for chartered credit unions.
The decade of the 1970s saw substantial growth for credit unions, with membership doubling and assets tripling to over $65 billion.
[edit] 1980s on
The high interest rates and unemployment in the early 1980s brought insurance losses; the enhancement of member services in the 1980s accompanied deregulation and increased flexibility in merger and field of membership criteria. Previously, membership in credit unions was generally limited to groups with a pre-existing common bond, often employees of a particular company or trade. Membership eligibility was opened up to include much larger, loosely-defined groups, such as all residents of a geographical area. The National Credit Union Share Insurance Fund experienced strain, and credit unions lobbied for Congressional oversight to recapitalize the Fund.
In 1985 the plan was enacted, and federally insured credit unions recapitalized the NCUSIF by depositing 1 percent of their shares into the Share Insurance Fund. The fully-capitalized National Credit Union Share Insurance Fund has "fail safe" features. Only once in 1991, when equity level dipped below 1.23 percent, has the Board charged credit unions a premium to insure deposits.
During the previous decade and into the 21st century, credit unions are steadily growing. Failures remain low, and the Share Insurance Fund maintains a healthy equity level.
[edit] Insurance Coverage
Most properly established share accounts in federally insured credit unions are insured up to the Standard Maximum Share Insurance Amount (SMSIA), which is $100,000 as of April 2006, but may be increased in the future. Recent legislation has increased the insurance coverage on certain retirement accounts, such as IRAs and Keoghs, up to $250,000. Generally, if a credit union member has more than one account in the same credit union, those accounts are added together and insured in the aggregate. [2][3] [4]
However, credit unions may also offer an array of additional financial services which are not covered by federal insurance.
