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Federal Credit Union Act

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Federal Credit Union Act


The Federal Credit Union Act (FCUA) is the source of authority for all federally chartered credit unions and governs the coverage and terms of insured accounts at all federally insured credit unions. It also determines the structure and duties of NCUA. The Congress of the United States found the following, and embodied the same in the Federal Credit Union Act of 1934 (Amended):

The American credit union movement began as a cooperative effort to serve the productive and provident credit needs of individuals of modest means.

Credit unions continue to fulfill this public purpose, and current members and membership groups should not face divestiture from the financial services institution of their choice as a result of recent court action.

To promote thrift and credit extension, a meaningful affinity and bond among members, manifested by a commonality of routine interaction, shared and related work experiences, interests, or activities, or the maintenance of an otherwise well understood sense of cohesion or identity is essential to the fulfillment of the public mission of credit unions.

Credit unions, unlike many other participants in the financial services market, are exempt from Federal and most State taxes because they are member-owned, democratically operated, not-for-profit organizations generally managed by volunteer boards of directors and because they have the specified mission of meeting the credit and savings needs of consumers, especially persons of modest means.

Improved credit union safety and soundness provisions will enhance the public benefit that citizens receive from these cooperative financial services institutions.

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