The National Association of Federally-Insured Credit Unions (NAFCU) has been an influential industry trade group since its founding in 1967. Representing both large and small federally-insured credit unions, NAFCU’s mission is to advocate for, educate, and assist its members, thereby promoting efficiency and success across the industry.
The Significance of NAFCU
NAFCU holds substantial influence, representing 72% of all federal credit union (FCU) assets and 51% of all federally insured credit union (FICU) assets. With over 180 federally-insured, state-chartered credit unions (FISCUs) among its members, it remains dedicated to shaping the laws and regulations affecting federal credit unions. Headquartered in Arlington, Va., NAFCU serves as a key player in national discussions around credit union legislation.
Understanding Federally-Insured Credit Unions
Federal credit unions function like banks but are unique in being member-owned and governed by federal law rather than state law. These institutions are regulated by the National Credit Union Administration (NCUA), and member deposits receive protection through the National Credit Union Share Insurance Fund—similar to the FDIC insurance for banks.
The Federal Credit Union system’s foundation goes back to 1934 with the passage of the Federal Credit Union Act, promoting both savings and home financing. Federally recognized under the auspices of the NCUA, these unions benefit from tax-exempt status under Section 501(c)14 of the United States Internal Revenue Code.
Despite their exemption from corporate income tax due to their non-profit nature, federal credit unions must fund regulatory activities through fees and maintain their deposit insurance. Federally insured credit unions also have reporting obligations to the NCUA, making transparency and accountability an ongoing priority.
NAFCU’s Strategic Priorities and Historical Achievements
Since its inception in 1967, NAFCU’s strategic goal has been to ensure that the federal credit union industry thrives. Its first significant achievement was the creation of the National Credit Union Share Insurance Fund, safeguarding members’ deposits across the nation.
In the 1990s, NAFCU successfully defended against attempts to weaken this insurance. More recently, during the debates on the Dodd-Frank financial reform legislation, NAFCU stood firm against the inclusion of credit unions under the Consumer Financial Protection Bureau’s (CFPB) jurisdiction. Arguing that the non-profit, member-owned nature of credit unions warranted different treatment compared to for-profit banks, NAFCU emphasized that excessive regulation would burden these community-focused institutions.
As an advocate, NAFCU continues to work tirelessly to ensure that federal credit unions receive fair consideration in legislative and regulatory processes, safeguarding their unique role in the financial ecosystem and ensuring they remain robust institutions faithfully serving their members.
Related Terms: Federal Credit Union, National Credit Union Administration, Credit Union Share Insurance Fund, Dodd-Frank Act, Consumer Financial Protection Bureau.
References
- National Association of Federal Credit Unions. “2019 NAFCU Report Credit Unions”. Page 7.
- National Association of Federal Credit Unions. “Federal Advocacy”.
- National Association of Federal Credit Unions. “Consumer Resources”.
- National Association of Federal Credit Unions. “Credit Union Tax Exemption”.
- MyCreditUnion.gov. “Federal Credit Union Act”.
- National Association of Federal Credit Unions. “Share Insurance Fund Overview”.
