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From the May-14, 2008 issue of Credit Union Times Magazine • Subscribe!
NCUA: Federal Credit Unions Are Depository Institutions
WASHINGTON -- Federal credit unions are depository institutions as defined by law, according to an opinion issued by the NCUA.
Sheila Albin, the agency's associate general counsel, said that by accepting deposits, in the form of shares, credit unions fulfill their role under federal law of "promoting thrift among its members and creating a source of credit for provident and productive purposes.''
Albin wrote the opinion in an April 14 response to an inquiry from Thomas Johnson, the president/CEO of the Business Consortium Alliance of Puerto Rico.
Credit unions are depository institutions as defined by the Federal Reserve Act but not under the Federal Deposit Insurance Act, which created the fund that insures bank deposits.
The NCUA insures credit union deposits and its insurance program is backed by the full faith and credit of the United States government.
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