WASHINGTON - Both major credit union trade associations are panning an NCUA plan to dramatically alter the current federal regulatory process for approving multiple group credit unions' applications to serve underserved areas. At the same time, the American Bankers Association indicated it supports NCUA's plan.
In a comment letter, CUNA, questioning the very basis for the plan, said it has a "fundamental disagreement with the basic rationale for the proposal and the analysis of the Federal Credit Union Act's provisions regarding underserved areas that underlie the proposal."
"While we appreciate efforts to clarify and update rules, we are not aware of problems with the current process that indicate that the (field of membership) FOM Manual provisions on underserved applications are not clear and which would justify a broad new regulation on underserved areas and the application process," CUNA said in its letter.
NAFCU, meanwhile, called the proposal "overly complicated" and said it would deter many credit unions from applying to serve underserved areas. NAFCU said it objects to the plan to incorporate the definition of "well- defined local community" that currently applies in the community chartering context and does not believe that a supporting letter should be necessary.
The American Bankers Association, meanwhile, supports the proposal, including limiting underserved designations to census tracts. It said it further recommends that if a branch of any financial institution is located in a proposed area, "this would indicate with high probability that the area is not undeserved." (c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved. http://www.cujournal.com/ http://www.sourcemedia.com/
