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A corporate credit union, also known as a central credit union, provides services to natural person (consumer) credit unions. In the credit union industry, they are sometimes referred to as "the credit union’s credit union". In the United States, corporate credit unions may either be chartered by the National Credit Union Administration (NCUA), or under state authority if permitted under that state's financial services laws.
A credit union is a member-owned financial cooperative, controlled by its members and operated on the principle of people helping people, providing its members credit at competitive rates as well as other financial services.
The National Credit Union Administration (NCUA) is the independent federal agency created by the United States Congress to regulate, charter, and supervise federal credit unions. With the backing of the full faith and credit of the U.S. government, NCUA operates and manages the National Credit Union Share Insurance Fund, insuring the deposits of more than 111 million account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions. As of September 2016, there were 5,573 federally insured credit unions, with assets totaling more than $1.38 trillion, and net loans of $957.3 billion.
Corporate credit unions are owned by the credit unions that choose to do business with them and provide short term (Fed Funds) and long term investments (in government approved instruments). Corporate credit unions also provide financial settlement services through the clearing of payments (check clearing), ACH (Automated Clearing House), electronic funds transfers (EFT) and ATM transaction services and networks.
In banking and finance, clearing denotes all activities from the time a commitment is made for a transaction until it is settled. This process turns the promise of payment into the actual movement of money from one account to another. Clearing houses were formed to facilitate such transactions among banks.
Electronic funds transfer (EFT) are electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems, without the direct intervention of bank staff.
Originally, most states operated their own corporate credit union, which had strong ties to the credit union league operating in that state. Many corporate credit unions also provided consumer services to the employees and official family members of credit unions in cases where local or Federal laws prevented people employed by or having an interest in the operation of a financial institution as a means of fraud prevention. The majority of modern corporate credit unions no longer perform a consumer function.[ citation needed ]
A credit union league or credit union central is cooperative federation for credit unions.
In law, fraud is deliberate deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud itself can be a civil wrong, a criminal wrong, or it may cause no loss of money, property or legal right but still be an element of another civil or criminal wrong. The purpose of fraud may be monetary gain or other benefits, such as obtaining a passport or travel document, driver's license or qualifying for a mortgage by way of false statements.
Through the 1980s, the corporate credit union industry underwent a consolidation movement due to limited resources in the face of increasing demands or because of institution failures (ex. CapCorp, a Washington DC based corporate credit union that failed in the 1990s). There has also been a move by the stronger corporate credit unions to cross state lines and offer their services to credit unions that were previously outside their scope of business.
In business, consolidation or amalgamation is the merger and acquisition of many smaller companies into a few much larger ones. In the context of financial accounting, consolidation refers to the aggregation of financial statements of a group company as consolidated financial statements. The taxation term of consolidation refers to the treatment of a group of companies and other entities as one entity for tax purposes. Under the Halsbury's Laws of England, 'amalgamation' is defined as "a blending together of two or more undertakings into one undertaking, the shareholders of each blending company, becoming, substantially, the shareholders of the blended undertakings. There may be amalgamations, either by transfer of two or more undertakings to a new company, or to the transfer of one or more companies to an existing company".
The largest corporate credit union in the United States was U.S. Central Credit Union. U.S. Central Credit Union and the second largest corporate credit union, Western Corporate Federal Credit Union, were placed in conservatorship by the NCUA on March 20, 2009. [1] On September 24, 2010, NCUA regulators also seized three wholesale credit unions located in Connecticut, Illinois and Texas. [2]
U.S. Central Federal Credit Union was the largest corporate credit union in the United States. Unlike consumer driven credit unions, U.S. Central provided its services only to other corporate credit unions, in effect acting as the "corporate credit union's credit union". The organization was founded in 1974. The organization had to be shut down in 2009 as a result of the 2008 financial crisis. Eventually, Credit Suisse was forced to pay $400 million to resolve claims that it sold faulty mortgage-backed securities to U.S. Central Federal Credit Union
Conservatorship is a legal concept in the United States. A guardian or a protector is appointed by a judge to manage the financial affairs and/or daily life of another due to physical or mental limitations, or old age. A person under conservatorship is a "conservatee," a term that can refer to an adult. A person under guardianship is a "ward," a term that can also refer to a minor child.
The NCUA Corporate Stabilization Program was created on January 28, 2009, in response to investment losses incurred at U.S. Central Credit Union. U.S. Central was a third-level corporate credit union that provided services to other corporate credit unions, which in turn served public-facing credit unions.
[3] Retrieved April 5th, 2018
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The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation providing deposit insurance to depositors in U.S. commercial banks and savings institutions. The FDIC was created by the 1933 Banking Act, enacted during the Great Depression to restore trust in the American banking system. More than one-third of banks failed in the years before the FDIC's creation, and bank runs were common. The insurance limit was initially US$2,500 per ownership category, and this was increased several times over the years. Since the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2011, the FDIC insures deposits in member banks up to US$250,000 per ownership category.
Financial institutions, otherwise known as banking institutions, are corporations that provide services as intermediaries of financial markets. Broadly speaking, there are three major types of financial institutions:
Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the integrity of the financial system. This may be handled by either a government or non-government organization. Financial regulation has also influenced the structure of banking sectors by increasing the variety of financial products available. Financial regulation forms one of three legal categories which constitutes the content of financial law, the other two being market practices, case law.
Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, consumer-finance companies, stock brokerages, investment funds, individual managers and some government-sponsored enterprises. Financial services companies are present in all economically developed geographic locations and tend to cluster in local, national, regional and international financial centers such as London, New York City, and Tokyo.
The Federal Financial Institutions Examination Council (FFIEC) is a formal U.S. government interagency body composed of five banking regulators that is "empowered to prescribe uniform principles, standards, and report forms to promote uniformity in the supervision of financial institutions". It also oversees real estate appraisal in the United States. Its regulations are contained in title 12 of the Code of Federal Regulations.
Digital Federal Credit Union (DCU) is a credit union based in Marlborough, Massachusetts. It has over 800,000 members and is the largest credit union headquartered in New England as measured by assets, managing over US $8 billion. DCU is regulated under the authority of the National Credit Union Administration (NCUA) of the US federal government.
The National Credit Union Share Insurance Fund provides deposit insurance to protect the accounts of credit union members at federally insured institutions in the United States. Created in 1970, the Share Insurance Fund is administered by the National Credit Union Administration, an independent federal financial regulator. The Share Insurance Fund is funded completely by participating credit unions, and not one penny of insured savings has ever been lost by a member of a federally insured credit union. The Share Insurance Fund is backed by the full faith and credit of the United States government.
Bank regulation in the United States is highly fragmented compared with other G10 countries, where most countries have only one bank regulator. In the U.S., banking is regulated at both the federal and state level. Depending on the type of charter a banking organization has and on its organizational structure, it may be subject to numerous federal and state banking regulations. Apart from the bank regulatory agencies the U.S. maintains separate securities, commodities, and insurance regulatory agencies at the federal and state level, unlike Japan and the United Kingdom. Bank examiners are generally employed to supervise banks and to ensure compliance with regulations.
A bank is a financial institution that accepts deposits from the public and creates credit. Lending activities can be performed either directly or indirectly through capital markets. Due to their importance in the financial stability of a country, banks are highly regulated in most countries. Most nations have institutionalized a system known as fractional reserve banking under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are generally subject to minimum capital requirements based on an international set of capital standards, known as the Basel Accords.
Credit unions in the United States serve 100 million members, comprising 43.7% of the economically active population. U.S. credit unions are not-for-profit, cooperative, tax-exempt organizations. The clients of the credit unions became partner of the financial institution and their presence focuses in certain neighborhoods because they center their services in one specific community. As of March 2016, the largest American credit union was Navy Federal Credit Union, serving U.S. Department of Defense employees, contractors, and families of servicepeople, with over $75 billion in assets and over 6.1 million members. Total credit union assets in the U.S. reached $1 trillion as of March 2012. Approximately 236,000 people were directly employed by credit unions per data derived from the 2012 NCUA Credit Union Directory.
Alaska USA Federal Credit Union is a credit union headquartered in Anchorage, Alaska, chartered and regulated under the authority of the National Credit Union Administration (NCUA). In the United States, Alaska USA is among the largest credit unions by assets, and among the 10 largest credit unions by membership.
Western Bridge Corporate Federal Credit Union, or WesCorp, was a financial services cooperative headquartered in San Dimas, California. As a corporate credit union, WesCorp provided services to natural person (consumer) credit unions. WesCorp served America's credit union industry as an aggregator of financial products and services for the purpose of delivering cost-savings and greater efficiencies to more than 950 member/owner credit unions throughout the United States.
Debbie Matz, since November 2016, has served on the Board of the Mutual of Omaha Bank where she is Vice Chairman of the Risk and Compliance Committee and a member of the Audit Committee. In addition, she has served on the Advisory Board of OpenDoor Trading, since January 2017. Ms. Matz also served as the eighth board chairman of the National Credit Union Administration (NCUA). She was appointed by U.S. President Barack Obama. NCUA is an independent federal agency that oversees the United States’ credit union industry, which has more than $1.2 trillion in assets. NCUA supervises federal credit unions and operates the National Credit Union Share Insurance Fund (NCUSIF) that protects deposits up to $250,000 of nearly 105 million account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions.
Michael E. Fryzel is an American attorney with offices in Chicago, Illinois. He specializes in the financial services sector and is a consultant to numerous businesses licensed and regulated by various government entities. Following the 2016 general election, Fryzel served on President Donald J. Trump's Transition Team and developed the Agency Action Plan for the National Credit Union Administration.