Chairman Harper Stresses Credit Unions’ Responsibility to Members
ALEXANDRIA, Va. (June 26, 2024) – The National Credit Union Administration commemorated today the 90th anniversary of the signing of the Federal Credit Union Act of 1934 into law by President Franklin Delano Roosevelt, which authorized the formation of federally chartered credit unions in all states.
“With the Federal Credit Union Act turning 90 years old today, it’s appropriate to consider not only where we’ve been, but also where we are now and where we’re headed,” said NCUA Chairman Todd M. Harper. “The passage of the Federal Credit Union Act was a watershed moment in our nation’s history. But, just as that law was forward-thinking when enacted nearly a century ago, it must evolve to reflect current realities with an eye to the future.”
“The Federal Credit Union Act is the rare legislation that’s still important 90 years later,” NCUA Vice Chairman Kyle Hauptman said. “Credit unions themselves have been in America for 115 years. Our job at the NCUA is to ensure that Americans can continue to have a wide array of unique options for their banking needs.”
Said NCUA Board Member Tanya Otsuka, “The Federal Credit Union Act, signed in 1934, laid the groundwork for today’s $2.3 trillion credit union system that serves millions of members. Today, we celebrate the growth of our cooperative credit system, while recommitting ourselves to making sure it lives up to its original purpose of providing savings and credit to people of modest means.”
The NCUA marked the anniversary of the Federal Credit Union Act’s signing with a gathering of former NCUA Board Members at the agency’s headquarters and a panel discussion reflecting on the federal system of cooperative credit created in 1934.
In his remarks, Chairman Harper noted the credit union system’s “bright spots” and “hotspots.” Bright spots include the system’s resilience and performance, and the dedication of NCUA employees to protecting credit unions’ safety and soundness and consumers. Hotspots include the use of fintech, including artificial intelligence, and the associated data privacy, integrity, cybersecurity, and automated bias concerns facing the credit union system and the financial services industry. The Chairman identified two blind spots he said prevent the credit union system from reaching its full potential: electronic payment losses and the NCUA’s lack of vendor authority.
“The good news is that hotspots and blind spots can become bright spots with the right measures in place,” Harper said.
The NCUA will engage in a digital outreach initiative throughout the year to mark the anniversary. A historical timeline of credit union and NCUA history is available on NCUA.gov. The NCUA is also highlighting historical content on its social media channels.
The Federal Credit Union Act also created a federal agency to oversee credit unions at the national level. The then-newly created Federal Credit Union Division was initially placed in the Farm Credit Administration but, over time, moved to other agencies until the National Credit Union Administration was created in 1970. The NCUA has evolved considerably since then, as has the credit union system, into what it is today. That includes creating the National Credit Union Share Insurance Fund in 1970, to protect the share deposits of now nearly 140 million Americans. Prior to 1970, credit unions operated without federal deposit insurance.
As of March 31, 2024, there are more than 4,500 federally insured credit unions serving more than 140 million members and holding assets of $2.31 trillion.