WASHINGTON – NCUA renewed its request to Congress this morning to allow all credit unions–not just multiple group charters–to add underserved communities to their fields of membership, and also asked that all credit unions be allowed to provide services in adjacent low-income areas, a major initiative to expand credit union markets.
The allowance to serve adjacent communities would apply without more restrictive requirements set out under the Community Development Financial Institutions program and NCUA’s own rules on serving local communities, according to David Marquis, executive director of NCUA, who was testifying before Congress on the availability of consumer credit.
NCUA has been lobbying Congress for a decade to expand its underserved FOM program, which is now restricted under the Federal CU Act to multiple group credit unions. The new allowance would enable more than 1,000 community charters to add underserved communities too.
“Allowing single common-bond credit unions and community-chartered credit unions the opportunity to add underserved areas to Fields of Membership would open up access for many more unbanked and underbanked households to credit union membership,” said Marquis, during a hearing this morning before the House Financial Services Committee.
The new request comes as the agency’s underserved expansion program has come to a stall–just five credit unions were approved for underserved additions in the first half of 2001, compared to 117 in 2005 and 26 for 2010.
But like efforts to increase the cap on member business loans and allow credit unions to raise alternative capital, the move to extend the underserved expansions has long been stalled by opposition to the bankers, who see it has new encroachments on their markets. The proposal to allow community chartered credit unions to add underserved communities has been included in legislation several times, but has never been passed by Congress.
