Federal Credit Unions (FCUs) are Depository Institutions

08-0232 / April 2008
Federal Credit Unions (FCUs) are Depository Institutions

Dear Mr. Johnson:

You have asked if FCUs are depository institutions. Yes, FCUs are depository institutions.

The Federal Credit Union Act (FCU Act) defines an FCU as “a cooperative association organized. . . for the purpose of promoting thrift among its members and creating a source of credit for provident or productive purposes.” 12 U.S.C. 1752(1). FCUs fulfill this purpose by accepting deposits, in the form of shares, from members and using those deposits to make loans and provide other member services. FCUs are chartered and supervised by the National Credit Union Administration (NCUA), an independent federal agency. NCUA insures the share deposits of all FCUs and many state-chartered credit unions through the National Credit Union Share Insurance Fund. NCUA’s share insurance is the same as the deposit insurance provided to banks by the Federal Deposit Insurance Corporation. Both federal insurance programs are backed by the full faith and credit of the United States government.
The FCU Act states the meaning of “depository institution” is as defined in section 19(b)(1)(A) of the Federal Reserve Act (FRA). 12 U.S.C. 1759 (c)(2)(A)(ii), 12 U.S.C. 461(b)(1)(A). Specifically, that section of the FRA includes in the definition of “depository institution” any insured credit union as defined in section 101 of the FCU Act, which includes all FCUs and state-chartered credit unions insured by NCUA, or any credit union which is eligible to apply to become an insured credit union under section 201 of the FCU Act. 12 U.S.C. 461(b)(1)(A)(iv), 12 U.S.C. 1752(7), 12 U.S.C. 1781.
Please contact Staff Attorney Frank Kressman or me with any additional questions. 

Sheila A. Albin
Associate General Counsel


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