WASHINGTON — Reps. Gwen Moore, D-Wisc., and Paul Cook, R-Calif., introduced a bill late Thursday allowing credit unions of any charter type to expand their fields of membership to underserved communities.
"We appreciate Representatives Moore and Cook's efforts to remove barriers that limit consumers' access to the financial services that they need," Dan Berger, president and CEO of the National Association of Federally-Insured Credit Unions, said after the bill was introduced.
Currently, only credit unions with multiple-common-bond charters can add underserved communities to their fields of membership. The bill would allow all credit unions, regardless of charter type, to add such communities so long as they can demonstrate an ability and intent to serve them. The application process would require a credit union to present a business plan showing how it would serve the community for NCUA's approval. Credit unions would also have to update NCUA annually on the progress of their program.
The concept is not new, but prospects for the bill’s passage could be favorable as Congress is expected to pass a larger regulatory reform package early next year. The bill was not included in a Senate deal that was approved by the banking panel earlier this month, but credit unions will likely push for it to be part of the regulatory reform package before it is taken up by the House and Senate.
The plan was also endorsed by NCUA Chairman Mark McWatters during a June hearing before the Senate Banking Committee.
“Allowing federal credit unions with a community or single common-bond charter the opportunity to add underserved areas would open up access for many more unbanked and underbanked households to credit union membership,” McWatters said in his prepared remarks.
Moore serves on the House Financial Services Committee and told NAFCU in September the she planned to cosponsor the legislation that would “open credit unions' field of membership to anyone that belongs to a needy, poor community."
“Current rules are tremendously outdated and only allow credit unions to serve certain demographic areas,” she said.