National Credit Union Share Insurance Fund
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.
As of December 2016, Share Insurance Fund insured an estimated $1 trillion in member shares in more than 5,800 federally insured credit unions.
In 1970, Congress approved, and President Richard M. Nixon signed, Public Law 91-206 (see 12 U.S.C. §§ 1781–[1]1790(c)), creating the National Credit Union Administration as an independent federal financial regulator. Soon after, Congress established the National Credit Union Share Insurance Fund and made NCUA responsible for its administration.
The Share Insurance Fund is approximately $13 billion in total, made up of $2.8 billion in retained earnings and approximately $10 billion in contributed capital from credit unions. Contributed capital is the one percent of insured shares deposited by each federal credit union, as well as all federally insured, state-chartered credit unions. The Federal Credit Union Act requires the NCUA Board to set a target equity ratio of at least 1.20 percent and no more than 1.50 percent of total insured deposits. It is NCUA Board policy that the normal operating equity ratio is 1.30 percent.
The majority of the fund is invested in United States treasury securities, with a portion of the earnings being used to fund NCUA’s operations. NCUA gets about $200 million of its current budget from the Share Insurance Fund, with the remainder coming from operating fees charged to regulated credit unions.
...
Wikipedia