Federal Credit Union Act & NCUA (Ch. 1) Flashcards
What are the three major titles of the FCU Act?
- General Provisions - Establishes how federal credit unions can be legally chartered and organized and what acts can be performed. Specifies information about credit union governance including requirements for the board, annual meetings, supervisory committees, and information about the rights of credit union members.
- Share Insurance - National Credit Union Share Insurance Fund is the federal fund created by Congress in 1970 to insure member’s shares in federally insured credit unions. Limit was increased from $100k to $250k by passage of Dodd-Frank and Consumer Protection Act (July 2010). Federally insured credit unions maintain 1% of the credit union’s shares in the NCUSIF. NCUA Board is permitted to set the operating level between 1.2% and 1.5%. Must report to Congress if the equity ratio falls below 1.2%.
- Central Liquidity Facility - Mixed ownership government corporation created to serve as a liquidity lender to credit unions experiencing unusual or unexpected liquidity shortfalls. Added to FCU Act in 1978. Member credit unions own the CLF that exists within NCUA. Membership is voluntary and open to all credit unions that purchase CLF stock. Two types of membership: regular (natural person credit unions) and agent (corporate credit unions).
Where does NCUA get its authority from?
Derives its supervisory authority from the Federal Credit Union Act.
Board members are appointed by the president, and confirmed by the Senate. The president designates one of the members to be chairman.
How many regional offices does NCUA have? What are their duties?
3 Regional Offices - Each regional office is responsible for oversight, examination, and supervision of the federal insured credit unions in its geographical area.
How does the National Credit Union Share Insurance Fund (NCUSIF) remain funded?
Federally insured credit unions maintain 1% of the credit union’s shares in the NCUSIF. NCUA Board sets the normal operating level between 1.2% and 1.5%. Normal operating level is set at or near 1.38% of federal insured credit union deposits. Must notify Congress if the equity ratio of the fund falls below 1.2%.
