WASHINGTON -
Turned down twice for authority to serve the tiny state of Delaware, Strosser is lobbying Congress to amend the Federal CU Act to remove a bar on statewide charters.
The president of the $150-million credit union said he was prepared for the NCUA Board to reject his credit union's application to serve all three of Delaware's counties and the state's 800,000 population-as it did Feb. 15-and he is discussing potential changes to the FCU Act with his state's congressional delegation to ease that and other FOM restrictions.
A Change To Rules
A recent change to NCUA rules also bars Del-One, which serves 100 select groups, from adding underserved communities if it converts to a community charter covering one or two of Delaware's three counties.
While at least one state, Washington, allows statewide charters, and several others allow the mixing of community and multiple groups into hybrid charters, Del-One, formerly known as Delaware FCU, does not have that option because Delaware does not have a state charter.
So Strosser is shopping language to the lawmakers that would allow federally chartered credit unions to mix multiple groups with communities into a hybrid charter. The Del-One CEO has had discussions with the three members of his congressional delegation, Sens. Thomas Carper and Joseph Biden, and Rep. Michael Castle, and he hopes to enlist their support in getting changes to the law.
In rejecting Del-One's request a second time NCUA ruled that the application for a statewide charter does not comply with the NCUA Field of Membership and Chartering Manual.
First, the manual requires that a community be a single, geographically well-defined area where individuals have common interests or interact. But NCUA ruled the state of Delaware is actually two distinct communities separated by the Delaware Canal; with the northern quarter of the state mostly urban, and the southern three-quarters mostly rural.
In addition, NCUA ruled that statewide borders do not comply with the manual's requirement that a community be a "well-defined local community, neighborhood, or rural district." NCUA made the same ruling in 2000 when the credit union's request for a statewide charter was first rejected.
A Potential Solution
Strosser believes he has a solution. His proposal would first amend the FCU Act, on which the agency's FOM manual is based, to remove the word "local" from the requirement for a community charter, thereby including a state's borders in the allowable communities. He noted that NCUA has awarded community charters for much larger populations, many more counties and broader geographic areas.
In addition, his proposed amendment would define FOM as "persons within one or more groups of the following or a combination of such groups...thus allowing the mixing of charter types.
"This thing ought to be in CURIA," said Strosser, noting that the wording comes right out of the model CU Act, written by CUNA and the leagues. "Of course, I have a situation that they can identify with."
