Bankers Back NCUA Into UnderservedCorner
ALEXANDRIA, Va. - (05/30/06) Uncertainty over how to resolvea legal morass over its underserved policy caused the NCUA Boardlast week to postpone a critical vote on new rules for its field ofmembership expansions, agency sources told The Credit UnionJournal. NCUA Board members plan to bar community chartered creditunions from underserved expansions, but want to protect more than200 community charters already granted underserved expansions inapparent violation of the law. Those credit unions have investedmore than $1.3 billion by building branches, ATMs and otherfacilities and made $4 billion in loans and collected $3.4 billionin deposits form 1.6 million new members in those communities. Butthe American Bankers Association, which has sued NCUA overunderserved expansions granted community charters made it clear itwont drop its suit unless NCUA withdraws those expansions.The case is pending before the same federal judge who ruled NCUAviolated the law in granting four broad community charters in Utah.The three NCUA Board members were struggling last week to find away to protect the affected credit unions and their new members,while convincing the bankers to end their suit. The three Boardmembers agreed to postpone the fateful vote on a new rule becausethere was no consensus on a solution.