Redesigning the NCUSIF: The Cooperative Way to “Finish the Job”

On Feb 8, 1984, NCUA Chair Ed Callahan gave his GAC keynote, an annual tradition.  He started by describing the state of the industry with one word: “fantastic”.

He acknowledged credit unions’ success in meeting the challenges of the previous two years: implementing deregulation and expanding credit union access across the country.

But there was one more structural change necessary to complete a sound cooperative system-redesigning the NCUSIF’s premium based funding.

The proposed change, depositing 1% of insured savings for continual underwriting, was recommended in a Report to Congress dated April 1983, Credit Union Share Insurance.

The Report’s  seven sections examined the history of cooperative insurance, risk rating, expanding insurance coverage, merging the three federal funds, and revisions to the current NCUSIF system.  An 8-page appendix listed over 50  credit union commenters, including leagues, state regulators, credit unions and the state cooperative insurance funds.

Why Listen to the Speech Today ?

This eleven-minute excerpt from the 14-minute recording is a critical moment in NCUA and credit union history.  It began a joint legislative effort to restructure the NCUSIF on cooperative principles, a design that has sustained for four decades. In these same years, the premium-based FSLIC failed, merging with the FDIC. The FDIC has had multiple periods of negative equity and still struggles today to find an adequate financial model.

The address is more than history. Ed’s “finish the job” challenge is a prime example of regulator industry collaboration. These mutual connections were empowering. It is a vision of leadership guided by “power-with,” not “power-over.”

Change was made through honest, open discussion seeking “a better way.” Over 2,000 comments were received to the proposals in the April 1983 study in which all parties had a say.  Chairman Callahan’s approach was based on “relational power” not assumed legal authority.  He was committed to teaming with credit unions-“we, not me.”  The cooperative way.

This excerpt is available at: 

I believe you will find this talk as enlivening and informative today, as it was years ago.




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