Federal Credit Union Act
The Federal Credit Union Act is an Act of Congress
Act of Congress
An Act of Congress is a statute enacted by government with a legislature named "Congress," such as the United States Congress or the Congress of the Philippines....

 enacted in 1934. The purpose of the law was to make credit available and promote thrift through a national system of nonprofit, cooperative
A cooperative is a business organization owned and operated by a group of individuals for their mutual benefit...

 credit unions. This Act established the federal credit union
Credit union
A credit union is a cooperative financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members...

 system and created the Bureau of Federal Credit Unions
Bureau of Federal Credit Unions
The Bureau of Federal Credit Unions was a federal agency in the United States that supervised and chartered federal credit unions from 1934 until 1970. The Bureau was created through the Federal Credit Union Act as part of the New Deal. It was self-financing and did not receive appropriations from...

, the predecessor to the National Credit Union Administration
National Credit Union Administration
The National Credit Union Administration is the United States independent federal agency that supervises and charters federal credit unions...

, to charter and oversee federal credit unions. The general provisions in the Federal Act were based on the Massachusetts Credit Union Act of 1909, and became the basis of many other state credit union laws. Under the provisions of the Federal Credit Union Act, a credit union may be chartered under either federal or state law, a system known as dual chartering
Dual chartering
Dual chartering refers to the system by which credit unions in the United States can be chartered under either of two governmental authorities; by either the federal government or by the state government...

, which is still in existence today.

Credit union law in the U.S. built on earlier legislation such as that developed by Franz Hermann Schulze-Delitzsch
Franz Hermann Schulze-Delitzsch
Franz Hermann Schulze-Delitzsch was a German economist. He was responsible for the organizing of the world's first credit unions.-History:Schulze-Delitzsch was born at Delitzsch, in Prussian Saxony...

 in Germany and Alphonse Desjardins
Alphonse Desjardins (co-operator)
Gabriel-Alphonse Desjardins , born in Lévis, Quebec, was the co-founder of the Caisses Populaires Desjardins , a forerunner of North American credit unions and community banks.- Early life :...

 in Canada. Among the individuals responsible for formulating credit union legislation in the United States were Edward Filene
Edward Filene
Edward Albert Filene was an American businessman, social entrepreneur and philanthropist...

, Pierre Jay
Pierre Jay
Pierre Jay was the first chairman of the Federal Reserve Bank of New York.He graduated from Yale University in 1892, and was a member of Skull and Bones, one of the best known of the secret societies based at Yale University...

 and Roy Bergengren
Roy Bergengren
Roy F. Bergengren was an American attorney and pioneer of the United States credit union movement. Hired by Edward Filene in July 1921 to head the Credit Union National Extension Bureau, Bergengren carried out an ambitious legislative agenda that resulted in the enactment of the Federal Credit...


The Act is amended periodically to evolve and remain a modern credit union law. This contemporary law, coupled with the NCUA Board's commitment to reduce regulatory burden, enables federal credit unions to offer a variety of services to meet the financial needs of their members. For example, in addition to basic passbook share savings account
Savings account
Savings accounts are accounts maintained by retail financial institutions that pay interest but cannot be used directly as money . These accounts let customers set aside a portion of their liquid assets while earning a monetary return...

s, many federal credit unions offer share drafts, share certificates, credit cards, and individual retirement account
Individual Retirement Account
An individual retirement arrangement is the blanket term for a form of retirement plan that provides tax advantages for retirement savings in the United States...

s. In recent years, many have expanded their lending programs to include real estate, member business, and guaranteed student loans as well as the traditional consumer loans (primarily auto and signature loans). As technology evolves, more and more federal credit unions respond by offering transaction services by telephone and by personal computer via the internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...


External links

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