U.S. Central Federal Credit Union (commonly abbreviated as USCU and USFCU) was the largest

corporate credit union A corporate credit union, also known as a central credit union, provides services to natural person (consumer) credit unions. In the credit union industry, they are sometimes referred to as "the credit union’s credit union". In the United States ...

in the United States. Unlike consumer driven credit unions (referred to as "natural person" credit unions in the industry), U.S. Central provided its services only to other corporate credit unions, in effect acting as the "corporate credit union's credit union". The organization was founded in 1974. The organization had to be shut down in 2009 due to the

2008 financial crisis The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...

. Eventually,

Credit Suisse Credit Suisse Group AG (, ) was a global Investment banking, investment bank and financial services firm founded and based in Switzerland. According to UBS, eventually Credit Suisse was to be fully integrated into UBS. While the integration ...

was forced to pay $400 million to resolve claims that it sold faulty

mortgage-backed securities A mortgage-backed security (MBS) is a type of asset-backed security (an "Financial instrument, instrument") which is secured by a mortgage loan, mortgage or collection of mortgages. The mortgages are aggregated and sold to a group of individuals ( ...

to U.S. Central Federal Credit Union. U.S. Central did not serve consumers directly, a role fulfilled by consumer

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

, it was instead established to serve the credit union industry by providing opportunities for investments through government approved instruments and providing liquidity (credit) needs to regional and state corporate credit unions which need them. U.S. Central also provided other industry standard services such as payment systems,

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 ...

services and item processing. The organization also provided economic services and forecasts specific to the credit union industry. Many of its operations and services paralleled that of a

central bank A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mo ...

, except it serves corporate credit unions rather than commercial banks. U.S. Central Federal Credit Union was located in

Lenexa, Kansas Lenexa is a city in Johnson County, Kansas, United States, and part of the Kansas City metropolitan area. As of the 2020 census, the population of the city was 57,434. making it the ninth-most populated city in Kansas. It is bordered by the ...

. In January 2009, 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 ...

injected $1 billion into U.S. Central. On March 20, 2009, NCUA placed U.S. Central Credit Union into

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 ...

. The NCUA was unable to obtain a buyer for the services and began winding down its operations. The credit union was officially shut down October 29, 2012.

References

Credit unions of the United States Banks established in 1974 {{US-finance-company-stub

See also

References