The NAFCU Journal July - August 2017 - 2

OUR FIRST 50 YEARS: SNAPSHOT

A Solo Credit Union Voice
Is Heard and Victorious

I

n 1991, then-NAFCU Board Chairman H.C. "Hank" Klein wrote,
"Being a leader is never easy. But ...
NAFCU's history is filled with
instances of the association unhesitatingly marching to its own drummer
when it was in the best interests of federal credit unions."

Klein's comments at the time were in
response to a solo position taken by
NAFCU regarding a Treasury Department proposal that year that would have
required credit unions to write down
their 1 percent deposit in the National
Credit Union Share Insurance Fund
(NCUSIF) and placed a Treasury representative on the National Credit Union
Administration (NCUA) Board.
NAFCU stood apart from other organizations in its direct opposition to the
proposal, arguing that it was much too
early in the history of the NCUA and
NCUSIF to concede such significant
points. NAFCU's member credit unions
wholeheartedly agreed.
Thus commenced the 1991 1 percent
NCUSIF showdown, during which
NAFCU stood against other trade
associations and regulatory bodies in
order to protect the best interests of
its members. Even the NCUA Board
generally supported the proposal, as did
the governing leadership of other credit
union trade associations.
Under the Deficit Reduction Act of
1984, a credit union is required to
make a one-time deposit equal to 1
percent of all its insured shares into
the NCUSIF. A credit union, under
2

generally accepted accounting principles, accounts for the 1 percent deposit
as an asset due to the nature of the
fund and the condition under which
the deposit is maintained.
As of 1989, the NCUSIF remained
in good standing and, according to
NAFCU's research, was the only one
of the three federal deposit insurance
funds - including the Federal Deposit
Insurance Corp. and the Federal
Savings and Loan Insurance Corp. -
that had not assessed an annual
premium on member institutions in
recent years. However, a law signed by
President George H.W. Bush that year,
known as the Financial Institutions
Reform, Recovery and Enforcement
Act (FIRREA), aimed at bailing out
the troubled savings and loan industry
threatened to change credit unions'
well-functioning federal share insurance structure.
The law required that the U.S. Treasury
Department work with the NCUA to
examine the adequacy of credit union
capital and whether the NCUSIF
should be separate from the agency.
The Government Accountability Office
(GAO) - then titled the General
Accounting Office - was also to conduct a similar study focused exclusively
on credit unions.
After details of the Treasury and GAO
reports came out, the Treasury, in language for a new bill, proposed that credit
unions should write down their 1 percent deposit in the fund over a 12-year
period and have a representative from
the department sit on NCUA's board.

NAFCU wrote each member of Congress about the credit union provisions
within the Treasury proposal, and credit
union leaders and the association's
staff logged many hours visiting with
lawmakers explaining their position.
In fact, attendance at NAFCU's 1991
Congressional Caucus reached a record
high for the time.
Other credit union trade associations
eventually rescinded support of the
Treasury proposal, enabling a united
front for the industry. When the final bill
was passed later that year, credit unions'
basic federal governing and insurance
structures remained intact.
Had NAFCU not stood up against the
bill, support for the proposal among the
lobbying and regulatory community
would have been unanimous, and credit
unions' federal regulatory governing and
insurance structures would have been
changed in a major way.
While this victory occurred almost 30
years ago, NAFCU's leadership continues to stand with its federally-insured
member credit unions today, as it has for
the past 50 years, and will continue to do
so well into the future. Even if standing
alone, NAFCU will strive to ensure the
best outcomes for credit unions. Learn
more about our first 50 years at
www.nafcu.org/50.

THE NAFCU JOURNAL  JULY-AUGUST 2017


http://www.nafcu.org/50

Table of Contents for the Digital Edition of The NAFCU Journal July - August 2017

Our First 50 Years
Events Calendar
From the Chair
Inside NAFCU
The Digital Download
How Secure Is Your Credit Union?
The Bank Secrecy Act
2017 Annual NAFCU Award Winners
2016 NAFCU Annual Report
Getting to Know …
Management Insight
Compliance Central
Inside NAFCU Services
From the President’s Desk
The NAFCU Journal July - August 2017 - Cover1
The NAFCU Journal July - August 2017 - Cover2
The NAFCU Journal July - August 2017 - 1
The NAFCU Journal July - August 2017 - Our First 50 Years
The NAFCU Journal July - August 2017 - Events Calendar
The NAFCU Journal July - August 2017 - From the Chair
The NAFCU Journal July - August 2017 - 5
The NAFCU Journal July - August 2017 - Inside NAFCU
The NAFCU Journal July - August 2017 - 7
The NAFCU Journal July - August 2017 - 8
The NAFCU Journal July - August 2017 - 9
The NAFCU Journal July - August 2017 - 10
The NAFCU Journal July - August 2017 - 11
The NAFCU Journal July - August 2017 - 12
The NAFCU Journal July - August 2017 - 13
The NAFCU Journal July - August 2017 - The Digital Download
The NAFCU Journal July - August 2017 - 15
The NAFCU Journal July - August 2017 - How Secure Is Your Credit Union?
The NAFCU Journal July - August 2017 - 17
The NAFCU Journal July - August 2017 - 18
The NAFCU Journal July - August 2017 - 19
The NAFCU Journal July - August 2017 - 20
The NAFCU Journal July - August 2017 - 21
The NAFCU Journal July - August 2017 - The Bank Secrecy Act
The NAFCU Journal July - August 2017 - 23
The NAFCU Journal July - August 2017 - 24
The NAFCU Journal July - August 2017 - 25
The NAFCU Journal July - August 2017 - 26
The NAFCU Journal July - August 2017 - 27
The NAFCU Journal July - August 2017 - 28
The NAFCU Journal July - August 2017 - 29
The NAFCU Journal July - August 2017 - 2017 Annual NAFCU Award Winners
The NAFCU Journal July - August 2017 - 31
The NAFCU Journal July - August 2017 - 32
The NAFCU Journal July - August 2017 - 33
The NAFCU Journal July - August 2017 - 34
The NAFCU Journal July - August 2017 - 35
The NAFCU Journal July - August 2017 - 36
The NAFCU Journal July - August 2017 - 2016 NAFCU Annual Report
The NAFCU Journal July - August 2017 - 38
The NAFCU Journal July - August 2017 - 39
The NAFCU Journal July - August 2017 - 40
The NAFCU Journal July - August 2017 - 41
The NAFCU Journal July - August 2017 - 42
The NAFCU Journal July - August 2017 - 43
The NAFCU Journal July - August 2017 - 44
The NAFCU Journal July - August 2017 - 45
The NAFCU Journal July - August 2017 - 46
The NAFCU Journal July - August 2017 - 47
The NAFCU Journal July - August 2017 - Getting to Know …
The NAFCU Journal July - August 2017 - 49
The NAFCU Journal July - August 2017 - Management Insight
The NAFCU Journal July - August 2017 - 51
The NAFCU Journal July - August 2017 - Compliance Central
The NAFCU Journal July - August 2017 - 53
The NAFCU Journal July - August 2017 - Inside NAFCU Services
The NAFCU Journal July - August 2017 - 55
The NAFCU Journal July - August 2017 - From the President’s Desk
The NAFCU Journal July - August 2017 - Cover3
The NAFCU Journal July - August 2017 - Cover4
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