The National Credit Union Administration (NCUA)

The NCUA is the independent federal agency created by the U.S. Congress to regulate, charter, and supervise federal credit unions.

Learning Objective

Describe the NCUA and its role in the United States

Key Points

As the insurer and regulator of Federally chartered credit unions, the NCUA oversees credit union safety and soundness, much like the FDIC.
To protect against the failure of credit unions, NCUA implemented a 12-month examination cycle for federally insured credit unions to detect problems in individual credit unions before they became insurmountable.
The NCUA is governed by a three-member board appointed by the President of the United States and confirmed by the United States Senate. The president also chooses which member will serve in the position of chairman.

Term

NCUA
The National Credit Union Administration (NCUA) is the independent federal agency created by the U.S. Congress to regulate, charter, and supervise federal credit unions.

Example

On March 20, 2009, during the financial crisis of 2007–2010, the NCUA took over the two largest corporate credit unions with combined assets of $57 billion, because of the losses on their investments in mortgage-backed securities.

Full Text

The National Credit Union Administration (NCUA)

The National Credit Union Administration (NCUA) is the United States independent federal agency that supervises and charters federal credit unions. NCUA also 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. The chartering of credit unions in all states is due to the signing of the Federal Credit Union Act by President Franklin D. Roosevelt in 1934 as part of the New Deal. 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 for regulation would shift over the years as the agency migrated from the Federal Deposit Insurance Corporation to the Federal Security Agency, then to the Department of Health, Education, and Welfare.

As the insurer and regulator of federally chartered credit unions, the NCUA oversees credit union safety and soundness, much like the FDIC. It is sometimes required to place credit unions in conservatorship. On March 20, 2009, during the financial crisis of 2007–2010, the NCUA took over the two largest corporate credit unions with combined assets of $57 billion because of the losses on their investments in mortgage-backed securities.

The National Credit Union Share Insurance Fund (NCUSIF) is the federal fund created by Congress in 1970 to insure member's 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 the NCUA's standard maximum share insurance amount at $250,000. All deposit insurance resources reflect this higher level of coverage. Credit unions may also offer an array of additional financial services which are not covered by federal insurance.

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