History of NCUA
In 1934, President Roosevelt signed the Federal
Credit Union Act into law authorizing the formation offederally chartered credit unions in all states.
The purpose of the federal law was to
make credit available and promote thrift through
a national system of nonprofit, cooperative credit
unions.
After the Federal Credit
Union Act was signed into law, the agency overseeing
credit unions was first
housed at the Farm Credit Administration. Regulatory
responsibility shifted over the years
as the Bureau of Federal Credit Unions moved from
the Federal Deposit Insurance Corporation, the
Federal Security Agency, and the Department
of Health, Education and Welfare.
Meanwhile, credit unions
grew steadily in the 1940s and 1950s and by 1960 credit union membership
reached
more than 6 million people at over 10,000 federal
credit unions.
In 1970, the National Credit Union Administration,
an independent federal agency was created to charter
and supervise federal credit unions and the National
Credit Union Share Insurance
Fund (NCUSIF) was formed to insure credit union deposits.
In the independent credit union spirit, the NCUSIF
was created without tax dollars and
capitalized solely by credit unions.
The 1970s brought major changes
in the products offered by financial institutions
and credit unions found
they too needed to expand their services. In 1977,
legislation brought expanded services
to credit union members, including share certificates
and mortgage lending. In 1979, a three-member Board
replaced the NCUA administrator.
In the same year, Congress created the Central
Liquidity Facility, the credit union lender of last
resort.
The 1970s were years of tremendous
growth in credit unions. The number of credit union members
more than
doubled and assets in credit unions tripled to over
$65 billion.
Deregulation, increased flexibility in merger and
field of membership criteria, and expanded member
services characterized the 1980s. High interest rates
and unemployment in the early '80s brought
supervisory changes and insurance losses. With the
Share Insurance Fund experiencing stress, the credit
union community called on Congress
to approve a plan to recapitalize the Fund.
In 1985,federally insured
credit unions recapitalized the NCUSIF by depositing 1 percent of their
shares
into the Share Insurance Fund. Backed by the "full
faith and credit of the United States Government," the National Credit Union Share Insurance Fund has "fail safe" features.
Since the recapitalization, the NCUA Board has only
charged credit unions one premium when the Fund dropped
to a 1.23 percent equity level in 1991.
During the 1990s and into the
21st century, credit unions have been healthy and
growing. Credit union failures remain low and the Share Insurance Fund
maintains a healthy equity level.
The original
intent of Congress to create a system of not-for-profit
cooperatives that promote thrift and thwart usury today serves
nearly 82 million
members with deposits exceeding $520 billion and
loans over $355 billion in more than 9,500federally
insured credit unions.
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