NCUA Rejects Bid For Big Community Charter
ALEXANDRIA, Va. – In a rare move, the NCUA Board yesterday denied a request for Vantage CU of St. Louis to convert to a federal charter encompassing its vast state-granted charter spanning seven counties and almost 3 million people in the neighboring states of Missouri and Illinois.
The broad community grant does not comply with provisions of the Federal CU Act requiring that community charters exhibit “interaction” and “common interests” among the constituent parts, something Missouri’s state law does not include, according to the NCUA Board. Rather, the state law allows credit unions to add communities that are merely contiguous, the Board ruled, in rejecting the request by the $650 million credit union, based in the St. Louis suburb of Bridgeton.
The action by the NCUA Board, which was upholding a ruling by the agency’s Midwest Region Four, is unusual in that NCUA rarely declines an application for a community charter. It is even more unusual in that the agency almost always accepts existing FOMs for credit unions converting to federal charters.
Vantage had applied to NCUA in 2008 to convert to a federal charter using its existing FOM, which encompassed four counties in Missouri and three in Illinois. The community grant would have been one of the biggest ever approved by NCUA, both in terms of area and population. The Regional Director denied the application and a request for a reconsideration based on lack of interaction/common interests.
In denying the credit union’s appeal, the NCUA Board voted two to one, with Gigi Hyland voting no. Hyland said she was convinced that the Vantage application did exhibit the necessary interaction to define it as a community under NCUA’s rule.