• The population is 2.5 million or less;
• The area includes a dominant core—a dominant city, county, or equivalent with a majority of all jobs in the core; and
• The dominant city, county, or equivalent contains at least one-third of the area’s population.
Areas previously approved by NCUA would be “grandfathered,” so an exact area already permitted for another federal
credit union would be allowed for an applying credit union, regardless of the new criteria.
NCUA also proposes defining the term “rural district” as one that has:
• Well-defined contiguous geographic boundaries;
• Greater than 50% of its population in census blocks designated as rural; and
• A total population of 100,000 or less.
CUNA’s letter supported the use of a statistical approach to determine communities, but urged the agency to allow federal
credit unions to supplement such data with narrative information.
Also, because the proposal would exclude many communities, CUNA urged NCUA to reconsider the specific statistical criteria for multiple political jurisdictions and rural areas listed earlier. In their place, we encouraged the agency to consider following other OMB statistical-area categories that would provide more flexibility to federal credit unions.
Other provisions in the proposal would require a credit union to demonstrate how it will implement its business plan to serve the requested area, and would authorize examiners to review the plan and impose sanctions for noncompliance during the first three years after application approval. CUNA strongly opposed the use of such sanctions.
Regarding underserved areas, CUNA’s letter urged that the focus of a credit union’s application should be on the unmet needs of the area requested, and that a federal credit union should be able to submit narrative information documenting how it will meet those needs. CUNA also urged that underserved areas be grandfathered, so later applicants could serve the same area under a streamlined process.
Our letter refuted American Bankers Association (ABA) charges that encourage NCUA to reduce and contain credit union charters and expansions. CUNA’s letter stated: “The ABA wants credit unions to be limited to serving communities of the smallest size possible. Unfortunately for their argument, the Federal Credit Union Act doesn’t contain size limitations…”
In addition to pursuing a range of advocacy issues for credit unions, we’ll continue to seek an improved FOM process—even as the credit union system continues discussions about the utility of FOM limits.
MARY MITCHELL DUNN is senior vice president/deputy general counsel for the Credit Union National Association. Contact her at 202-508-6736 or at firstname.lastname@example.org.