State-Chartered Credit Unions, 1954
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the eligibility basis for continuation Notes and Brief ReDorts of group life insurance into conform- A. ity with the “normal retirement” Federal Employees Group it now relates to the insurance on Provisions under the civil-service re- all members. Since under the amend- tirement system. Under that sys- Life Insurance Act Amend- ment the insurance liability involved tem, 15 Years of total service-includ- ments* will be greater, actuarial deficiencies ing 5 years of civilian service-are Gn August 11, 1955, the President are more probable. (These deficien- required in order to retire at age 62 signed Public Law No. 356, affecting cies will, of course, have to be borne with full survivor benefit protection. the life insurance then in force for by the fund.) A minor amendment authorizes members of an association of Federal The arrangements for the transfer the Secretary of the Treasury to employees and extending the PrOVi- are to be made within 6 months after invest the money held by the fund sions for group life insurance after August 11, 1955. In “extenuating in interest-bearing obligations of the retirement to some persons not for- circumstances” the Civil Service United States. NO mention of in- merly eligible. Commission may agree upon a later vestment was made in the 1954 act. The original act’ made PrOViSiOn date, but it cannot be later than for the assumption by the Civil Serv- August 17, 195’7. Only life insurance ice Commission of life insurance on in effect on August 11, 1955, may be State-Chartered Credit association members previously re- so transferred. Thus the association Unions, 1954” tired, or otherwise separated from member may continue the full Federal service, but not for members amount of his association insurance The credit union movement in the in active service. This provision was in addition to the group life insur- United States acquired legal stat,us contingent upon termination by the ance provided under the 1954 act, as far back as 1909, when the Massa- association of all life insurance and the United States Government chusetts Legislature passed a law to agreements within 1 year-by AU- guarantees the benefits. provide for the chartering and or- gust 17, 1955. There was further The association insurance assumed ganization of credit unions. Today provision that, in allocating the Fed- by the fund is to be insured by one there are local credit union laws on eral employees’ group life insurance or more of the companies insuring the books of 44 States? the District among qualified insuring and re- or reinsuring the Federal employees’ of Columbia, and Puerto Rico. insuring companies, the amount to group life insurance. All insurance On December 31, 1954, there were be reinsured by a company with may, however, be placed with the 7,840 active State-chartered credit whom the association insurance had company carrying the association in- unions in the United States.a All originally been placed would be such surance. The 1955 amendments but 101 submitted reports on their that the group life insurance plus guarantee that, in allocating the in- operations in 1954 to the State the association insurance would not surance, the amount of group life official-usually the superintendent be less than the association insur- insurance on Federal employees, to- of banks-charged with the super- ance carried by the company at gether with the amount of associa- vision of credit unions. This ofilcial the end of 1953. The new law tion insurance so placed with the then forwarded to the Bureau of provides that, upon election by the insurance company, will not fall be- Federal Credit Unions a composite association, the Federal employees’ low that in effect in that company report on activities of credit unions life insurance fund will assume all at the end of 1953. in his State during 1954. Data for life insurance agreements of the Another amendment affects the the District of Columbia, Puerto association with all benefits guaran- continuation of group life insurance Rico, and all but four of the States teed. The membership contribution upon retirement. Previously, unless are on a calendar-year basis: data rates would remain unchanged, with the retirement was for disability, for Indiana, Kentucky, and New premiums paid to the fund under civilian service of 15 years was re- Hampshire are for the Ascal year conditions prescribed by the Commis- quired for such continuation. Under ended June 30, 1954, and data for sion. the law as amended, military service Missouri are for the flscal Year ended Any association electing to trans- may be included toward the 15-year September 30. fer the insurance to the fund is re- requirement. As an example, an Though the increase in the num- quired to transfer the lesser of (1) employee retiring with 13 years of ber and membership of State-char- the actuarial value of the insurance civilian service and 3 years of mili- tered credit unions was interrupted liability involved, and (2) its total tary service will now be eligible for assets. The original act contained a continuation of group life insurance, *Prepared by Ronald Gardner, Division similar provision, but the liability with the cost borne by the fund. of Programs and Reports, Bureau of Fed- eral Credit Unions. related only to the insurance on re- Since he lacked 15 years of civilian 1 Delaware, Nevada, South Dakota. and tired or terminated employees, while service, his insurance would have Wyoming have no credit union laws. been terminated under the original *See the Bdletin, November 1954 and *Prepared by Weltha Van Eenam, Divi- act (subject to the privilege of con- November 1953, for operations ln 1953 and 1952; for a summary report of earlier gears. sion of the Actuary. vert,ing to individual insurance at 1 See the Bulletin, October 1954, pages see the Monthly Labor Review, February 11-14. attained age). This change brings 1953. Bulletin, November 1955 17 during the war years, growth in as- Table 2 .-Total amount of loans and of real estate loans made by State- sets has been continuous since 1932 chartered credit unions, 25 States, 1954 1 (table 11, and by 1949 total assets amounted to $511 million. Four years Loans outstsndinp at end of period I Lonns made during period later, total assets had passed the Secured by Toto! Secured by $1.billion mark and by the end of Total rca1 estate real cstuw 1954 exceeded $1.2 billion. Member- ship in State-chartered credit unions, Total -.---_-...--._. $53S. i92,838 $147,634.136 ?$6nO,215,Oal 2 $53,221) 000 meanwhile, had exceeded 1 million Ahbamn ._..__._._._.____ 11,105,?76 I, 1.52,59i 19,566,555 Colorado-.. ._.... -.-_-_. Ifi, 317,222 2 577 875 20,190.425 ‘“‘1 331 on0 by the end of 1937, had passed the District of Columbia.-..- 2,232,0S.S ,212: 572 3,122,441 ’ 41:313 Florida ._.. .- ..-._ _._. 15,037,610 1,597,265 20, 591. 48.5 (9 2-million mark by the end of 1948, IOWB...................~. 2,685,l i2 23 189 836 Q47,311 and by the end of 1954 had reached K~nsss...-..--.-...---.-. :4:3E 849, i22 13: 226: 218 (9 Maine _.______.. --...-._. 1: 886’ 331 20,101 2.613,519 3,800 3.8 million. Massachusetts. --- ._.___. io 137’ 3.56 33,Q26,993 ’ 80,022,203 ‘11,079,984 Michigu-- _.._ --__--_-_ 72: 5800: 623 22.286,929 74.663.433 3.975,213 Operations in 1954 Minnesota. .______.__ --__ 43 9 6w I 579 17, Yi8,641 46,98Y.O91 6,942,412 Mississippi .-.- _....._ -.. Mi, 862 4.5, 793 425. iP5 Sj, 4i3 Geographical distribution.-Opera- Missoun 5 ____. ._._._ ._-_ 40. 343, IliO 6. ?53,492 (“1 New Hampshire 4 ___._._ 3,Oli.lll 1, iS2.565 13, tions of St.ate-chartered credit unions New Mexico .._________._ 375, 749 355 North Dakota.. _____ _-_. 3,36,458 339,438 ‘i. 849,650 (‘;; are shown, by State, in table 3. Ohio-...--.....---....--. 62.822.230 6,49i, 21 I 75, 741, QiO Though two States-California and Oklahoma .___.. -- --. 7, &38,316 309,174 PI t33; Or‘2FOtL.. __..... i, 216,546 064. 31 7,885,GQQ 126,914 Idaho-did not report for 1954, and Rhode Island------.-.-.- 26, 575,548 14 981 736 15,293,2i4 3,486,477 a few other States were unable to Tex3s.....--.....-..-.--. 33,1x0,492 1: 539: 494 45,568.529 819,361 report one or more of the items Utah . ..__._._ -_-..- 9,334,870 1, ?39,765 10,909,495 413,899 Vermont ._.. _- ._.. -.-...- 9s. Iwo 119,915 13, (3) shown in the table, totals for all Washington --.-.-.- 16,522,705 1,19a,363 id 324 @26 432,052 West Virginia . .._ 1.214.213 177,424 1: 635: 459 (9 items include estimates for the miss- Wisconsin.. _........ -. 67,371,218 29,234,813 56,838,647 10,073,093 ing information. .- I 1 Stptes rrportiyon relll estate loans. Dz ea nre J lbta not available. Assets of all credit unions operat- for calendar year unless otherwise noted. 4 Year ended June 30. ing under State charter totaled $l,- 2 Includes estimate for States not reporting. 5 Yex ended September 30. 241 million at the end of 1954, an increase of 19 percent from the total a year earlier. Average assets per 1954, compared with averages of 46 States shown in the table reported credit union stood at $160,351 in $148,994on December 31, 1953, and this item.