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CU service to underserved Rule change
WASHINGTON (11/21/08)—Final changes to the National Credit Union Administration’s process of approving multiple group credit unions' service to underserved areas are a significant improvement from the agency’s original proposal, according to the Credit Union National Association (CUNA). However, while CUNA appreciates the modifications, the group will continue to seek changes to a rule it believes is needlessly complex. NCUA made the following changes to its proposal:
*The final rule preserves for “underserved area” applicants the existing exemption from a requirement to submit a supplemental letter. The agency had considered requiring a supporting letter from credit unions seeking to add an underserved area: * The final rule changes the economic distress criteria for determining if a community is an investment area so that it is more compatible with the criteria used by the Community Development Financial Institutions (CDFI) Fund. To qualify as an underserved area, the local community must be an “investment area,” as defined by the CDFI Fund and it must also be underserved by other financial institutions; and * The final rule eases a burden that would have required a one-page narrative statement that describes the “significant unmet needs” for loans or other financial services in a proposed area, which would be supported by relevant data. The final rule allows credit unions to meet this obligation by fulfilling the current requirement to “identify the credit and depository needs of the community and detail how the credit union plans to serve those needs.”
The rule is effective 30 days after publication in the Federal Register. Use the resource link below to access the complete rule.
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