What Is the National Association of Federally-Insured Credit Unions (NAFCU)?
Let me tell you directly: The National Association of Federally-Insured Credit Unions, or NAFCU, is an industry trade group I know was founded in 1967 specifically to represent the interests of federal credit unions and to promote the overall success and efficiency of this sector. Its membership consists of both large and small credit unions, and it covers a significant portion of the industry.
NAFCU represents 72% of total federal credit union assets and 51% of all federally-insured credit union assets. You'll note that its membership also includes over 180 federally-insured state-chartered credit unions. The group's activities focus on representing, informing, educating, and assisting members on industry issues. Headquartered in Arlington, Virginia, one of NAFCU's primary goals is to influence the laws and regulations that impact federal credit unions.
Understanding the National Association of Federally-Insured Credit Unions (NAFCU)
To understand NAFCU, you need to grasp that it's a trade group dedicated to federal credit unions. These institutions function much like banks, but they're owned by their members and operate under federal law rather than state law. They're regulated by the National Credit Union Administration, and your deposits as a member are protected by the National Credit Union Share Insurance Fund, which is akin to FDIC insurance for banks.
The federal credit union system originated with the Federal Credit Union Act of 1934, aimed at promoting savings, homeownership financing, and other productive purposes. Credit unions recognized by the federal government through the NCUA—an independent federal agency—are tax-exempt under Section 501(c)(14) of the U.S. Internal Revenue Code.
Even though federal credit unions don't generate income and pay no corporate income tax, they must pay fees to support regulatory functions and deposit insurance. They're also required to report their finances to the NCUA at least annually, and sometimes more frequently.
Priorities of the National Association of Federally-Insured Credit Unions
NAFCU was established in 1967, and its first major policy achievement was the creation of the National Credit Union Share Insurance Fund, which provides deposit insurance for credit unions.
In the 1990s, NAFCU successfully fought against attempts to reduce deposit insurance for credit unions. The organization also played a significant role in the Dodd-Frank financial reform legislation, opposing moves to subject credit unions to oversight by the Consumer Financial Protection Bureau.
NAFCU maintained that, given credit unions' non-profit and member-owned nature, they shouldn't face the same scrutiny as for-profit banks, and complying with CFPB regulations would impose unnecessary burdens.
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