WASHINGTON -
America's Community Bankers, the trade group for S&Ls and a regular critic of NCUA, called on the credit union regulator to not only issue for public comment new and unprecedented community charter requests-but all FOM applications.
"Instituting a more transparent procedure would help the NCUA address criticisms that it has acted without proper consideration of applications that have been brought before it," ACB Regulatory Counsel Krista Shonk, wrote in a comment letter on NCUA's proposed clarification of community chartering rules. "It would also help the NCUA demonstrate the field of membership applications are thoroughly reviewed and that the agency approves only applications that are consistent with the statutory field of membership limits established for federal credit unions."
She suggested that CUs seeking FOM expansions publish a public notice, just as banks and S&Ls do when they want to establish a new branch. Publishing FOM applications in the Federal Register would not subject them to the public at large, according to Shonk, because the general public is not aware of the existence or function of this publication.
But CU executives reject the proposal, saying making the FOM process would just invite more mischief from the banks. "It would seem that all public comment would come from anti-credit union organizations such as banks and trade associations," America First FCU CEO Rick Craig said. "To expose the strategies, internal operations, business and marketing plans of a credit union to such scrutiny would be counter productive and possibly very damaging."
"From our perspective, the most potentially dangerous part of this proposal is the requirement for a public notice and comment period to be posted in the Federal Register for some community charter applications," said Gary Grinnell, president of Corning CU. "We feel that a credit union's field of membership is between the credit union and its regulatory agency, not competitors, community activists, opponents or even supporters."
E.L. Gull, Jr., Chartway FCU chair, went further, saying to open up the community chartering process to public scrutiny would only invite new fights with the banks, "thus undermining credit unions' ability to rapidly seize business opportunities."
Carlyn Roy, EVP at OSU FCU, likened the public comment period to publishing a member's loan application in the local newspaper and asking for community input if it would require an exception approval.
As part of its proposal to set new community charter boundaries, NCUA suggested issuing for public comment applications that set new parameters for a community FOM.
Marc Schaefer, president of Truliant, endorsed public scrutiny of those FOM applications, and suggested they be published in local newspapers, instead of the Federal Register. "Publication in a local newspaper," wrote Schaefer, "is more in line with the goal of defining "well-defined local community."
Numerous CUs expressed frustration with the requirement that federal credit unions give up their select employee groups after they convert to community charters. They said it causes them to discontinue services to many groups and prevents them from participating in mergers of unlike FOMs.
