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The National Credit Union Administration (NCUA) is a government-backed insurer of
credit union A credit union, a type of financial institution similar to a commercial bank, is a member-owned nonprofit organization, nonprofit financial cooperative. Credit unions generally provide services to members similar to retail banks, including depo ...
s in the United States, one of two agencies that provide
deposit insurance Deposit insurance or deposit protection is a measure implemented in many countries to protect bank depositors, in full or in part, from losses caused by a bank's inability to pay its debts when due. Deposit insurance systems are one component of ...
to depositors in U.S. depository institutions, the other being the
Federal Deposit Insurance Corporation The Federal Deposit Insurance Corporation (FDIC) is one of two agencies that supply deposit insurance to depositors in American depository institutions, the other being the National Credit Union Administration, which regulates and insures cred ...
, which insures commercial banks and savings institutions. The NCUA is an independent federal agency created by the
United States Congress The United States Congress is the legislature of the federal government of the United States. It is bicameral, composed of a lower body, the House of Representatives, and an upper body, the Senate. It meets in the U.S. Capitol in Washing ...
to regulate,
charter A charter is the grant of authority or rights, stating that the granter formally recognizes the prerogative of the recipient to exercise the rights specified. It is implicit that the granter retains superiority (or sovereignty), and that the rec ...
, and supervise federal credit unions. With the backing of the full faith and credit of the U.S. government, the NCUA operates and manages the
National Credit Union Share Insurance Fund The National Credit Union Share Insurance Fund provides deposit insurance to protect the accounts of credit union members at federally insured institutions in the United States. Created in 1970, the Share Insurance Fund is administered by the Na ...
, insuring the deposits of more than 124 million account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions. Besides the Share Insurance Fund, the NCUA operates three other funds: the NCUA Operating Fund, the
Central Liquidity Facility The Central Liquidity Facility (CLF) is a mixed-ownership United States (U.S.) government corporation created to improve the general financial stability of credit unions by serving as a liquidity lender to credit unions experiencing unusual or unexp ...
(CLF), and the Community Development Revolving Loan Fund (CDRLF). The NCUA Operating Fund, with the Share Insurance Fund, finances the agency’s operations. , there were 5,099 federally insured credit unions, with assets totaling more than $1.84 trillion, and net loans of $1.16 trillion. The NCUA exclusively insures credit unions, whereas commercial banks and savings institutions are insured by the Federal Deposit Insurance Corporation.


Organization

The NCUA is governed by a three-member board appointed by the
President of the United States The president of the United States (POTUS) is the head of state and head of government of the United States of America. The president directs the executive branch of the federal government and is the commander-in-chief of the United Stat ...
and confirmed by the
Senate A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...
. The President also chooses who will serve as Chairman. Board members serve six-year terms, although members often remain until their successors are confirmed and sworn in. The NCUA is administered through three regional offices, each responsible for specific states and territories.


History

As part of the
New Deal The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939. Major federal programs agencies included the Civilian Cons ...
, President
Franklin D. Roosevelt Franklin Delano Roosevelt (; ; January 30, 1882April 12, 1945), often referred to by his initials FDR, was an American politician and attorney who served as the 32nd president of the United States from 1933 until his death in 1945. As the ...
signed the Federal Credit Union Act into law in 1934. The law allowed the chartering of federal credit unions in all states. The federal law sought to make credit available and promote thrift through a national system of nonprofit, cooperative credit. At first, the newly created
Bureau of Federal Credit Unions The Bureau of Federal Credit Unions was a federal agency in the United States that supervised and chartered federal credit unions from 1934 until 1970. The Bureau was created through the Federal Credit Union Act as part of the New Deal. It was sel ...
was housed at the Farm Credit Administration. Regulatory responsibility shifted over the years as the bureau migrated from the
Federal Deposit Insurance Corporation The Federal Deposit Insurance Corporation (FDIC) is one of two agencies that supply deposit insurance to depositors in American depository institutions, the other being the National Credit Union Administration, which regulates and insures cred ...
to the
Federal Security Agency The Federal Security Agency (FSA) was an Independent agencies of the United States government, independent agency of the United States government established in 1939 pursuant to the Reorganization Act of 1939. For a time, the agency oversaw food a ...
, then to the Department of Health, Education, and Welfare. In the 1940s and 1950s, credit unions grew steadily, reaching a membership of more than six million people at over 10,000 federal credit unions by 1960.


1970s

The growth in credit unions resulted in an overhauling of the
Bureau of Federal Credit Unions The Bureau of Federal Credit Unions was a federal agency in the United States that supervised and chartered federal credit unions from 1934 until 1970. The Bureau was created through the Federal Credit Union Act as part of the New Deal. It was sel ...
to form the modern independent federal agency that presently regulates the industry. In 1970, the renaming to National Credit Union Administration was made possible in part by the creation of the
National Credit Union Share Insurance Fund The National Credit Union Share Insurance Fund provides deposit insurance to protect the accounts of credit union members at federally insured institutions in the United States. Created in 1970, the Share Insurance Fund is administered by the Na ...
(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 with the addition of the
Central Liquidity Facility The Central Liquidity Facility (CLF) is a mixed-ownership United States (U.S.) government corporation created to improve the general financial stability of credit unions by serving as a liquidity lender to credit unions experiencing unusual or unexp ...
, the lender of last resort for all credit unions. The decade of the 1970s saw substantial growth for existing credit unions, with membership doubling and assets tripling to over $65 billion.


1980s and 1990s

The high
interest rate An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, th ...
s and
unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for Work (human activity), w ...
in the early 1980s brought insurance losses. The NCUSIF experienced strain, and
credit union A credit union, a type of financial institution similar to a commercial bank, is a member-owned nonprofit organization, nonprofit financial cooperative. Credit unions generally provide services to members similar to retail banks, including depo ...
s lobbied Congress to recapitalize the Fund. In 1985, the plan became law, and federally insured credit unions recapitalized the NCUSIF by depositing 1 percent of their shares into the NCUSIF. The fully capitalized National Credit Union Share Insurance Fund has "fail safe" features. In 1991, when equity level dipped below 1.23 percent, the Board charged credit unions a premium to insure deposits. 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 select groups with a pre-existing common bond, often employees of a particular company or trade. Changes since 1998 as a result of H.R. 1151, the Credit Union Membership Access Act, opened up membership eligibility to include much larger and loosely defined groups. During the 1990s and into the 21st century, credit unions grew steadily in assets, shares and members. Failures remained generally low, and the Share Insurance Fund maintained a healthy equity level.


2000s and 2010s

During the 1990s and into the beginning of the 21st century, U.S. credit unions continued to develop as a whole. The NCUSIF also continued to thrive due to very few credit union failures. In 2008 and 2009, the global financial crisis exerted a strain on all institutions in the financial services sector – including credit unions. As a result, the Board charged NCUSIF premiums in 2009 and 2010. Ultimately, five of the largest wholesale corporate credit unions (Constitution Corporate, Members United Corporate, Western Corporate, Southwest Corporate, and U.S. Central Corporate) in the United States were rendered insolvent after investing in troubled mortgage-backed securities that became overwhelmed with unprecedented declines in value. In response to the growing corporate credit union crisis, the NCUA took the following actions: *Collaborated with the U.S. Treasury Department and Congress to establish the Temporary Corporate Credit Union Stabilization Fund (Stabilization Fund) to stabilize the U.S. credit unions, protect the NCUSIF and ensured credit unions, not taxpayers, paid the costs of the Stabilization Fund over time. *Re-securitized the unsuccessful mortgage backed securities after liquidating the five failed corporate credit unions. With a government-backed guarantee, the securities were sold to raise nearly $30 billion. *A temporary share guarantee was established for deposits at corporate credit unions. *Bridge corporate credit unions were established to ensure services continued to be provided to consumer credit unions during the transition and resolution timeframe. *Worked together with bridge corporate credit union members and to ensure a seamless transition of services to new entities. In addition to the corporate credit union crisis, the NCUA dealt with the failure of a number of consumer-owned credit unions, which weakened as a result of spikes in home foreclosures, business failures, and unemployment. To protect against the failure of more credit unions, the NCUA implemented a 12-month examination cycle for federally insured credit unions to detect problems in individual credit unions before they became insurmountable. NCUA also stepped up administrative actions wherever necessary to ensure prompt compliance. By year-end 2009, more than 96 percent of credit unions met the statutory definition of "well capitalized." On December 8, 2017, President
Donald Trump Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021. Trump graduated from the Wharton School of the University of Pe ...
issued an executive order revising the Seal for the National Credit Union Administration. On August 20, 2019, the D.C. Circuit Court of Appeals upheld much of the NCUA’s 2016 field-of-membership regulations changes, and on June 29, 2020, the Supreme Court of the United States denied an appeal to review the NCUA’s 2016 field-of-membership rule.


2020s and beyond

On March 10, 2020, the NCUA celebrated its 50th anniversary. On March 16, 2020, in response to the global coronavirus pandemic, the NCUA issued a Letter to Credit Unions that outlines several strategies credit unions may consider when determining how to address the challenges associated with COVID-19. Throughout the pandemic, the NCUA provided targeted regulatory flexibility, where appropriate, so federally insured credit unions could manage their operational and financial risks. Notably, the NCUA worked to bolster the
Central Liquidity Facility The Central Liquidity Facility (CLF) is a mixed-ownership United States (U.S.) government corporation created to improve the general financial stability of credit unions by serving as a liquidity lender to credit unions experiencing unusual or unexp ...
and enhance its ability to serve as a liquidity backstop for the system during 2020. Following the regulatory enhancements provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and changes to the agency’s regulations by the NCUA Board, the facility experienced a significant increase in its membership and borrowing capacity. Because the COVID-19 pandemic posed unique economic and financial challenges to rural and underserved communities, the NCUA committed the majority of its 2020 Community Development Revolving Loan Fund allocation to COVID-19 assistance. In 2021 and beyond, the NCUA's goals include advancing economic equity and justice within the credit union movement and build on the agency’s ACCESS program. Plans call for enhancing support for minority depository institutions, ensuring compliance with fair lending laws, advancing initiatives to close the wealth gap, and proactively considering future challenges like climate change to mitigate risks posed by rising seas, climbing temperatures, and devastating wildfires.


Insurance coverage

The National Credit Union Share Insurance Fund (NCUSIF) is the federal fund created by the
United States Congress The United States Congress is the legislature of the federal government of the United States. It is bicameral, composed of a lower body, the House of Representatives, and an upper body, the Senate. It meets in the U.S. Capitol in Washing ...
in 1970 to insure members' deposits in federally insured credit unions. On July 22, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law and included permanently establishing NCUA's standard maximum share insurance amount at $250,000. The NCUA operates and manages the NCUSIF, insuring the deposits of more than 111 million account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions. Credit unions may also offer an array of additional
financial services Financial services are the Service (economics), economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, acco ...
which are not covered by federal insurance.


Website

On March 9, 2011, then Board Chairman Debbie Matz unveiled MyCreditUnion.gov, a source of educational information and personal finance tips designed to help individuals make financial decisions. The website also explains how credit unions work, where to find one, and even how to start a credit union.


See also

*
Title 12 of the Code of Federal Regulations CFR Title 12 – Banks and Banking is one of 50 titles composing the United States Code of Federal Regulations In the law of the United States, the ''Code of Federal Regulations'' (''CFR'') is the codification of the general and permanent ...
*
Credit Union National Association The Credit Union National Association, commonly known as CUNA (pronounced "Cue-Nuh"), is a national trade association for both state- and federally chartered credit unions located in the United States. CUNA provides member credit unions with tr ...
*
NCUA Corporate Stabilization Program The NCUA Corporate Stabilization Program was created on January 28, 2009, in response to investment losses incurred at U.S. Central Credit Union. U.S. Central was a third-level corporate credit union that provided services to other corporate credit ...
*'' NCUA v. First National Bank & Trust''


References


External links

* *Th
NCUA
in the
Federal Register The ''Federal Register'' (FR or sometimes Fed. Reg.) is the official journal of the federal government of the United States that contains government agency rules, proposed rules, and public notices. It is published every weekday, except on feder ...
*Search for th
NCUA's Letters to Credit Unions and Other GuidanceSearch for the NCUA Individual Credit Union DataNCUA Share Insurance Calculator MyCreditUnion.Gov
{{Authority control Credit unions of the United States Bank regulation in the United States Independent agencies of the United States government Government agencies established in 1970 Financial regulatory authorities of the United States