The NCUA Corporate Stabilization Program was created on January 28, 2009, [1] in response to investment losses incurred at U.S. Central Credit Union. [2] 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.
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
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.
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The National Credit Union Administration (NCUA) is an autonomous agency of the United States federal government, and is responsible for regulating and insuring all federally insured credit unions in the United States.
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.
The United States of America (USA), commonly known as the United States or America, is a country comprising 50 states, a federal district, five major self-governing territories, and various possessions. At 3.8 million square miles, the United States is the world's third or fourth largest country by total area and is slightly smaller than the entire continent of Europe's 3.9 million square miles. With a population of over 327 million people, the U.S. is the third most populous country. The capital is Washington, D.C., and the largest city by population is New York City. Forty-eight states and the capital's federal district are contiguous in North America between Canada and Mexico. The State of Alaska is in the northwest corner of North America, bordered by Canada to the east and across the Bering Strait from Russia to the west. The State of Hawaii is an archipelago in the mid-Pacific Ocean. The U.S. territories are scattered about the Pacific Ocean and the Caribbean Sea, stretching across nine official time zones. The extremely diverse geography, climate, and wildlife of the United States make it one of the world's 17 megadiverse countries.
The NCUA's plan calls for all federally insured natural-person credit unions in the U.S. to pay an increased insurance premium to the National Credit Union Share Insurance Fund (NCUSIF) in 2009 to make up for the investment losses at U.S. Central, to which the NCUSIF has written a $1 billion capital note. [3] However, NCUA has provided no assurances that the capital losses of the corporate credit unions to be covered through the planned assessment in 2009 will be adequate to cover eventual bad debt losses.
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 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.
