A corporate credit union, also known as a central credit union, provides services to natural person (consumer)

credit union A credit union is a member-owned nonprofit organization, nonprofit cooperative financial institution. They may offer financial services equivalent to those of commercial banks, such as share accounts (savings accounts), share draft accounts (che ...

s. In the credit union industry, they are sometimes referred to as "the credit union’s credit union". In the United States, corporate credit unions may either be chartered by the

National Credit Union Administration The National Credit Union Administration (NCUA) is an American government-backed insurer of Credit unions in the United States, credit unions in the United States, one of two agencies that provide deposit insurance to depositors in U.S. deposi ...

(NCUA), or under state authority if permitted under that state's financial services laws. Corporate credit unions are owned by the credit unions that choose to do business with them and provide short term (

federal funds In the United States, federal funds are overnight borrowings between banks and other entities to maintain their bank reserves at the Federal Reserve. Banks keep reserves at Federal Reserve Banks to meet their reserve requirements and to clea ...

) and long term investments (in government approved instruments). Corporate credit unions also provide financial settlement services through the clearing of payments (check clearing), ACH ( Automated Clearing House),

electronic funds transfer Electronic funds transfer (EFT) is the transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems. The funds transfer process generally consists ...

s (EFT) and ATM transaction services and networks. Originally, most states operated their own corporate credit union, which had strong ties to the

credit union league A credit union league or credit union central is cooperative federation for credit unions. Canada In Canada, a credit union central is a back-end provider which provides infrastructure such as cheque clearance and online banking to its memb ...

operating in that state. Many corporate credit unions also provided consumer services to the employees and official family members of credit unions in cases where local or Federal laws prevented people employed by or having an interest in the operation of a financial institution as a means of

fraud In law, fraud is intent (law), intentional deception to deprive a victim of a legal right or to gain from a victim unlawfully or unfairly. Fraud can violate Civil law (common law), civil law (e.g., a fraud victim may sue the fraud perpetrato ...

prevention. The majority of modern corporate credit unions no longer perform a consumer function. Through the 1980s, the corporate credit union industry underwent a consolidation movement due to limited resources in the face of increasing demands or because of institution failures (ex. CapCorp, a Washington DC–based corporate credit union that failed in the 1990s). There has also been a move by the stronger corporate credit unions to cross state lines and offer their services to credit unions that were previously outside their scope of business. The largest corporate credit union in the United States was U.S. Central Credit Union. U.S. Central Credit Union and the second largest corporate credit union,

Western Corporate Federal Credit Union Western Bridge Corporate Federal Credit Union, or WesCorp, was a financial services cooperative headquartered in San Dimas, California. As a corporate credit union, WesCorp provided services to natural person (consumer) credit unions. WesCorp s ...

, were placed in

conservatorship Under U.S. law, a conservatorship results from the appointment of a guardian or a protector by a judge to manage the personal or financial affairs of another person who is incapable of fully managing their own affairs due to age or physical or m ...

by the NCUA on March 20, 2009. On September 24, 2010, NCUA regulators also seized three wholesale credit unions located in Connecticut, Illinois and Texas.

References

External links

NCUA Corporate Credit Union Supervisors Examination Guide

The European Union Project “Credit Cooperatives”
official web site Credit unions Cooperative federations {{Finance-company-stub

See also

References

External links