National Credit Union Administration

The NCUA grants FCU charters to groups sharing a common bond of occupation or association or to groups within a well-defined neighborhood, community, or rural district. A preliminary investigation is made to determine if certain minimum standards are met before granting a federal charter.

Supervisory activities are carried out through examiner contacts and through periodic policy and regulatory releases from the administration. The administration also maintains an early warning system designed to identify emerging problems as well as to monitor operations between examinations.

The administration conducts periodic examinations of federal credit unions to determine their solvency and compliance with laws and regulations and to assist credit union management in improving operations.

The act of October 19, 1970 (84 Stat. 994, 12 U.S.C.A. 1781 et seq.) provides for a program of share insurance. The insurance is mandatory for federal credit unions and optional for state-chartered credit unions that meet NCUA standards. Credit union members' accounts are insured up to $100,000. The National Credit Union Share Insurance Fund charges each insured credit union a premium of one-twelfth of 1 percent of the total member accounts (shares) outstanding at the end of the preceding calendar year.

High interest rates and insurance losses in the 1980s brought the insurance fund close to insolvency. In 1985, Congress approved a plan that enabled the credit unions to recapitalize the fund. The 1990s were marked by major changes including deregulation, expanded eligibility for membership, mergers, and an increase in member services. In 2001 the NCUA chartered, regulated, and/or insured more than 10,000 credit unions across the United States.