Public Scrutiny of FOM Expansions Panned

ALEXANDRIA, Va. – Credit union executives are opposing a proposal by NCUA that would open up all ground-breaking community charters to public scrutiny. "From our perspective, the most potentially dangerous part of this proposal is the requirement for a public notice and comment period to be posted in the Federal Register for some community charter applications," said Gary Grinnell, president of Corning CU, in a comment letter on NCUA’s bid to set new community chartering rules. "We feel that a credit union’s field of membership is between the credit union and its regulatory agency, not competitors, community activists, opponents or even supporters." Grinnell and other credit union executives worry that opening the community chartering process to public comment could invite new legal challenges and deter credit unions from seeking new markets. E.L. Gull, Jr., chairman of the board at Chartway FCU, went further, saying to open up the community chartering process to public scrutiny would only invite new fights with the banks, "thus undermining credit unions’ ability to rapidly seize business opportunities." Carlyn Roy, executive vice president at OSU FCU, likened the public comment period to publishing a member’s loan application in the local newspaper and asking for community input if it would require an exception approval. NCUA has proposed issuing newly defined communities that do not meet the standard definition of a community out for a 30-day public comment period. Most of the credit union commentators also asked NCUA to amend its rules to allow them to keep serving their select groups after converting to community charters, something that is currently barred by HR 1151, the 1998 CU Membership Access Act.