The National Credit Union Administration (NCUA) is the United States 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.

Nearly 82 million members are served as of December 2005, with deposits exceeding $520 billion and loans over $355 billion in more than 9,500 federally insured credit unions.

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. 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 would be 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.

Growth Prompts Change

Such an increase in demand for regulation would result in an overhauling of the Bureau of Federal Credit Unions to form the face of the modern independent federal agency to regulate under the present day title. In 1970, the renaming to National Credit Union Administration was made fully possible by the creation of the National Credit Union Share Insurance Fund (NCUSIF) to insure credit union deposits. Most impressively is the creation of the NCUSIF without any tax dollars, capitalized solely by credit unions.

By 1977, services available to credit union members would expand, including share certificates and mortgage lending. In 1979, a three-member Board replaced the NCUA administrator. Congress would add 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 spoke of incredible growth for credit unions, with membership doubling and assets tripling to over $65 billion.

Emergence of the National Credit Union Administration

The high interest rates and unemployment in the early 1980s brought about insurance losses; furthermore, the enhancement of member services in the 1980s accompanied deregulation and increased flexibility in merger and field of membership criteria. The National Credit Union Share Insurance Fund experienced strain, and credit unions lobbied for Congressional oversight to recapitalize the Fund.

In 1985 the plan would be 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.

External link

• National Credit Union Administration

Credit unions | Financial regulation in the United States | Independent Agencies of the United States Government