WASHINGTON (6/16/08)—Credit unions are asked to comment on proposed changes to the current federal regulatory process for approving multiple group credit unions' applications to serve underserved areas. In a comment call to credit unions, the Credit Union National Association (CUNA) noted that since the adoption of the Credit Union Membership Access Act in 1998, NCUA has revised the FOM provisions on underserved areas three times. In 1999 the NCUA made changes to implement the Credit Union Membership Access Act (CUMAA); in 2002 there were changes to include underserved area criteria from the Community Development Financial Institutions (CDFI) Fund; and in 2006 NCUA acted to prohibit community and single group credit unions from adding new underserved areas, as a result of a legal challenge launched by banking groups. At its May open board meeting, the agency again proposed changes to its “Chartering and Field of Membership Manual for Federal Credit Unions. This proposal:
* Requests comments on whether a supporting letter should be necessary when a multiple group credit union seeks to add an underserved area; * Would change the criteria for "economic distress" for determining if the community is an investment area so that it would be more compatible with the criteria used by the Community Development Financial Institutions Fund; * Would also require a one-page narrative statement that describes significant unmet needs for loans or other financial services in the proposed area; and * Would not apply to applications that already have been approved.
CUNA's Federal Credit Union Subcommittee is be reviewing the proposal and developing CUNA's comments. The proposal has not yet been published in the Federal Register
, which is a necessary step for a federal agency seeking public comment. Once it appears in that publication, interested parties will have 60 days to comment. Use the resource link below for more details on the NCUA’s complex proposal and to read CUNA’s complete comment call.