NCUA Corporate Stabilization Program
Encyclopedia
The NCUA Corporate Stabilization Program was created on January 28, 2009, in response to investment losses incurred at U.S. Central Credit Union
, which is the Corporate Credit Union
s' corporate credit union.
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 NCUA's plan calls for all federally-insured natural-person credit union
s 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. 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.
U.S. Central Credit Union
U.S. Central Federal Credit Union is the largest corporate credit union in the United States. Unlike consumer driven credit unions , U.S. Central provides its services only to other corporate credit unions, in effect acting as the "corporate credit union's credit union". The organization was...
, which is the Corporate Credit Union
Corporate Credit Union
A corporate credit union, also known as a central credit union, provides services to natural person credit unions. In the credit union industry, they are sometimes referred to as "the credit union’s credit union"...
s' corporate credit union.
The National Credit Union Administration
National Credit Union Administration
The National Credit Union Administration is the United States independent federal agency that supervises and charters federal credit unions...
(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
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
.
The NCUA's plan calls for all federally-insured natural-person credit union
Credit union
A credit union is a cooperative financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members...
s in the U.S. to pay an increased insurance premium to the National Credit Union Share Insurance Fund
National Credit Union Share Insurance Fund
The National Credit Union Share Insurance Fund is administered by the National Credit Union Administration for the purpose of providing deposit insurance to protect deposits of credit union members at insured institutions in the United States. It was created in 1970 shortly after the creation of...
(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. 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.
See also
- National Credit Union AdministrationNational Credit Union AdministrationThe National Credit Union Administration is the United States independent federal agency that supervises and charters federal credit unions...
- Federal Deposit Insurance CorporationFederal Deposit Insurance CorporationThe Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...
- Credit unionCredit unionA credit union is a cooperative financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members...
- Credit Union National AssociationCredit Union National AssociationThe Credit Union National Association, commonly known as CUNA , is a national trade association for both state- and federally-chartered credit unions located in the United States. CUNA provides member credit unions with trade association services, such as lobbying, professional development, and...
- Central liquidity facilityCentral liquidity facilityThe Central Liquidity Facility is a mixed ownership United States government corporation created to improve the general financial stability of credit unions by serving as a liquidity lender to credit unions experiencing unusual or unexpected liquidity shortfalls. Member credit unions own the CLF...
- Troubled Assets Relief ProgramTroubled Assets Relief ProgramThe Troubled Asset Relief Program is a program of the United States government to purchase assets and equity from financial institutions to strengthen its financial sector that was signed into law by U.S. President George W. Bush on October 3, 2008...
External links
- NCUA Corporate Stabilization Program
- CUNA's Advice and Calculators
- CUNA's Teleconference on the issue
- Yahoo! News: Navy FCU says NCUA plan is unacceptable
- Wall Street Journal U.S. moves to bail out credit unions
- Washington Post U.S. Aid goes to credit unions
- CU Potential blog: Analysis of the estimated costs of the NCUA program
- Corporate Central CU: Q&A about the NCUA program (pdf)