ALEXANDRIA, Va. – The NCUA Board yesterday approved a program to make permanent last year’s Member Services Assessment Pilot, which collected data indicating the approximate economic level of credit union members and how certain census tracts were being served by credit unions.
The data long has been sought by members of Congress to determine whether credit unions are adequately serving the underserved – a requirement under the preamble of the Federal CU Act.
NCUA officials emphasized the new data collection will not require any additional work by credit unions because the information collected, addresses and zip codes for members, has been collected under the automated AIRES examination since 1995, and information to be collected on services and products offered already is part of a 5300 Call Report.
“I want to make sure that the regulator burden is as minimal as possible, or nil,” said NCUA Chairman JoAnn Johnson, who joined board member GiGi Hyland in voting for the permanent program. “Rather than look at the data collection as a burden, I would look at it as a responsibility, and as an opportunity,” said Johnson, who has been working to convince Congress there is no need to extend the Community Reinvestment Act to credit unions.
NCUA Board Member Rodney Hood voted against last week’s proposal, likening it to “CRA-creep.”
“This teeters on the brink of imposing a CRA-like requirement on credit unions,” said Hood. “I oppose CRA or anything close to it.”
Members of the House have indicated they will introduce legislation, probably next year, to extend CRA to credit unions, insurers and other financial service providers.
NCUA staffers were clear that the information collected would not be used as part of an examination and would not be used to determine CAMEL or to induce credit unions to offer additional services or products.
The data will be inputted to geo-coding software and used to develop a report detailing how well and extensively credit unions are serving certain income distributions. The information will not be attached to names or specific credit unions.
The report also will include in general terms how extensive credit unions offer such products as check cashing, payday loans, no-fee checking, health savings accounts, money orders and financial education.
The data will be collected only from federally chartered credit unions, over which NCUA has jurisdiction.
NCUA plans to start assembling the data in January 2009 and present its first report in 2011. The findings will be made public, probably as part of NCUA’s annual report.
Credit unions have long fought efforts to collect such data because they feel it will be used to determine whether they are adequately serving low-income and other underserved populations. NCUA passed a similar plan in 2001, under which each community chartered credit union would be required to submit an annual Community Action Plan on how they serve the underserved. The plan was subsequently repealed after vehement objection from the credit union community, which compared it to CRA.
Fred Becker, president of NAFCU, which has long fought these initiatives, denounced yesterday’s move by NCUA. Like Hood, Becker said he worries about how the information will be used. “It is the first step down the road to CRA,” Becker told The Credit Union Journal yesterday. “To collect the data and not do anything with it – to expect that to happen – is naive.”
