Bankers Back NCUA Into Underserved Corner
Uncertainty over how to resolve a legal morass over its underserved policy caused the NCUA Board last month to postpone a critical vote on new rules for its field of membership expansions, according to agency sources.
NCUA Board members plan to bar community-chartered credit unions from underserved expansions, but want to protect more than 200 community charters already granted underserved expansions in alleged violation of the law.
Those credit unions have invested more than $1.3 billion by building branches, ATMs and other facilities and made $4 billion in loans and collected $3.4 billion in deposits form 1.6 million new members in those communities.
But the American Bankers Association, which has sued NCUA over underserved expansions granted community charters made it clear it won't drop its suit unless NCUA withdraws those expansions.
The case is pending before the same federal judge who ruled NCUA violated the law in granting four broad community charters in Utah.
The three NCUA Board members are struggling to find a way to protect the affected credit unions and their new members, while convincing the bankers to end their suit.
The three board members agreed to postpone the fateful vote on a new rule because there was no consensus on a solution.
Ed Roberts can be reached at robertscuj