Who Chose The 480?

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Another concern is the choice of credit unions. About 480 credit unions have been chosen to participate in the special Community Service examinations. Credit union representatives want to know how were those credit unions chosen? And will those credit unions give a proper portrait whether the entire movement is serving the underserved? And, since NCUA will only be examining federal charters during the program, what about state charters, which make up about 40% of all credit unions?

Both NAFCU and CUNA say they were not consulted on the design of the new program, even though they were told NCUA was planning to do something. Other questions include whether NCUA Chairman JoAnn Johnson's office designed the program on its own or with the advice of the other two board members? Whether Johnson had the authority to introduce this mandatory program (for those 480 credit unions) without first proposing it for public comment?

When D'Amours launched his program-which was geared at measuring community action by community-chartered credit unions-it caused an uproar in the credit union movement. Credit union executives and the trade associations objected because, first, it raised the question of whether they were doing their jobs right. Second, because they believed it was the first steps to CRA for credit unions. Third, was that by then, D'Amours had made so many enemies in the credit union movement that many people opposed the program just because they didn't like him.

In response, the credit union trades launched an unprecedented letter-writing campaign against D'Amours' program. Soon after D'Amours left NCUA the new board repealed the CAP, even before it was started.

Despite the objections to the program, there is a consensus that something has to be done to impress Congress, in light of the continuing criticism brought by community groups like the NCRC and Woodstock Institute, as well as the bankers. Key members of Congress made it clear during last year's hearing before the tax-writing House Ways and Means Committee that they expect credit unions to be serving the underserved as an essential part of their business plan in exchange for their federal tax exemption. The issue is bound to keep coming up during the legislative process, especially as Congress deliberates this year on regulatory relief and CURIA, the CU Regulatory Improvements Act.

CUNA has been careful not to publicly criticize the new NCUA program. But it's clear they don't like it either. CUNA President Dan Mica will only say the group will work with NCUA on what he calls the pilot phase but reserve the right to object down the road.

The Credit Union Journal's Ed Roberts can be reached at 202-434-0334, or at eroberts cujournal.com.

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