Stakes Growing In Battle Over UnderservedExpansions
WASHINGTON - (03/30/06) Hundreds of credit unions areworrying that an NCUA roll-back in its rules on underservedexpansions will jeopardize millions of dollars in new capitalexpansions and billions of dollars more in new loans and savingsaccruing in the nations low- and moderate-incomeneighborhoods. The American Bankers Association is insisting thatin order for it to drop its federal suit against NCUA the federalagency must bar the addition of any new members for some 200 creditunions in dozens of communities across the country, where NCUAvirtually concedes those credit unions were allowed to expandillegally. We dont think they should be allowed tocontinue in what amounts to these illegal expansions, KeithLeggett, senior economist for the ABA, told The Credit UnionJournal. CUNA figures that at least 182 community chartered creditunions that have received underserved expansions, in apparentviolation of the law, have invested more than $1.3 billion to bringfinancial services to underserved communities in the way ofbranches, ATMs and other service facilities. Those credit unionshave added 1.6 million new members and made $4 billion in loans andcollected $3.4 billion in savings in those communities. In acomment letter submitted on NCUAs rule proposal, FrankBerrish, president of Visions FCU, said his community charteredcredit union has invested more than $3 million to open six newbranches in underserved communities, and he submitted acomprehensive list of the special programs his credit union hascreated to serve communities, including debt counseling, no minimumbalance accounts, small saver certificates, low balance IRAs, nosurcharge ATMs, financial literacy, low-cost home mortgages andemergency loans. Visions FCU acted in good faith when weapplied and received approval to serve our underservedareas, said Berrish.