NCUA To Ban Underserved Expansions ForCommunity Charters
ALEXANDRIA, Va. - (03/08/06) The NCUA Board is expected toapprove a new regulation that will bar community-chartered orsingle common bond credit unions from participating in itsunderserved field of membership expansions, the heart of theagencys Access Across America program. Under a proposalbeing worked out, NCUA will allow as many as 200 community andmultiple group credit unions that have been granted underservedexpansions, in apparent violation of the law, to be grandfatheredto allow them to continue serving those communities, sources toldThe Credit Union Journal. The new regulation would allow NCUA tosettle an ongoing suit with the American Bankers Association andUtah bankers over the underserved program. The suit charges thatNCUAs underserved program violates provisions of HR 1151,the 1998 CU Membership Access Act, which restricted underservedexpansions to multiple group credit unions. NCUA temporarily bannedunderserved expansions for community and single common bond creditunions after the bankers filed suit last fall, in recognition ofthe questionable legality of those expansions.