ALEXANDRIA, Va. -
But the vote passed narrowly, two-to-one, to reject requests from CinFed FCU and Emery FCU for charters covering eight counties in the three-state region (Ohio, Kentucky and Indiana), because the disperse area does not meet NCUA requirements that a community FOM be "well-defined" and "local."
Last week's ruling came just three weeks after the NCUA Board rejected a request from Del-One FCU to serve the 800,000 residents of Delaware, ruling that the tiny state does not qualify as a "local" community, either.
But in rejecting last week's request from the two Ohio credit unions, the NCUA Board agreed to clarify its requirements for community charters, which have enabled federal credit unions to serve much broader areas with far greater populations than any of the three proposals rejected in the last two months.
Just last month, for example, NCUA approved a request from Dow Employees FCU to serve almost 3.5 million residents in Harris County, where Houston is located. And several other federal charters have been approved to serve areas that cross two or even three states.
The board appeared ready to approve the two Ohio charter requests as Gigi Hyland said she believed they each qualified under NCUA regulations, and Rodney Hood said he was also persuaded. But Hood said he decided to vote against it, saying he would "do more for the credit union system." Both board members agreed that NCUA should clarify its requirements for community charters.
In recommending rejection of the two Ohio charter requests, NCUA staff said the broad area, which covers three states, eight counties and 40 different municipalities, does not qualify as a single FOM with interaction between residents with common interests. "The evidence submitted did not lead us to conclude that the area is a local community," said Hattie Ulan special counsel to NCUA's General Counsel.
NCUA Chairman JoAnn Johnson, who voted against the charters, said she also had her doubts about the staff's recommendation, but said she was persuaded that the broad area does not qualify as a "local" community.
But Hyland disagreed. "There is no question that this is a clearly defined community with common interests," said the NCUA board member. She noted how the preponderance of residents live, work or spend money in Cincinnati and the surrounding communities. "There's no question that Cincinnati is the nexus of this community," she added.
