Bankers May Force Change In NCUA'sUnderserved Policy

ALEXANDRIA, Va. - (01/20/06) -- In another concession to thebankers, the NCUA Board Thursday issued for comment a proposed newrule that would restrict underserved expansions to multiple groupcredit unions only. The action virtually concedes the AmericanBankers Association's suit claiming NCUA violated provisions of theFederal CU Act by allowing America First FCU and as many as 200other community chartered credit unions to add underservedcommunities to their FOMs over the past five years. John Ianno,senior trial attorney for NCUA, told the Board they feel NCUA actedproperly in granting underserved expansions to community charters."But we believe the statutory language at question here issusceptible to multiple interpretations," said Ianno, He wasreferring to provisions in HR 1151, the 1998 CU Membership AccessAct which expressly allowed multiple common bond federallychartered credit unions to add underserved communities to theirFOMs, but is silent on underserved expansions for community orsingle common bond charters. NCUA Chairman JoAnn Johnson said shebelieves that Congress intended to allow all federally charteredcredit unions to add underserved communities. "We believe thestatutory language also makes clear that Congress intended to allowall charter types to serve underserved areas," said Johnson. Atstake are numerous broad expansions--some encompassing entire U.S.cities--that NCUA has granted under its underserved policy. Thebankers have especially targeted America First FCU, claiming the $3billion Utah credit union has used the underserved expansions toreenter several counties it was barred from by a 2004 federal courtruling finding that a six-county FOM granted by NCUA was toobroad.