Consolidated FCU Forced to Abandon Low-Income Community

ALEXANDRIA, Va. – The NCUA Board yesterday approved a request by Consolidated FCU for a broad community charter, but forced the $150 million Portland, Ore., credit union to surrender its South Carolina operations serving a low-income community. The NCUA action will allow the credit union to serve more than 1.6 million people surrounding the city of Portland, but requires it to give up it so-called underserved communities because of federal law. The Federal CU Act requires federal credit unions that convert to community charters to give up their select groups and also bars community charters from serving underserved communities – such as the one in Seneca, S.C., which Consolidated now serves as a select group. Provisions of the credit union regulatory relief bill, or CURIA, would address this situation by allowing credit unions to keep their select groups after converting to community charters and by allowing community charters to add underserved areas, just as multiple group charters can. NCUA Chairman JoAnn Johnson alluded to this dilemma before yesterday’s vote, saying there is only one other federal credit union that serves the low-income community. She hoped other state charters will step into the new vacuum. Under yesterday’s action, Consolidated FCU will still be able to serve existing members at its South Carolina branch, but will not be able to accept new members.