NCUA Proposal Goes Too Far, ICBA Says
A proposal by the National Credit Union Administration (NCUA) to significantly expand the chartering and field of membership opportunities for federal credit unions goes too far and undermines the concept of the common bond, ICBA wrote in a comment letter to the credit union regulator. (The letter is available at www.icba.org.)
"The key tenet underlying the credit union charter is the existence of a common bond," wrote ICBA Chairman A. Pierce Stone. "The more that the NCUA disregards that fundamental element and allows membership to a broad variety of individuals that do not share a true common bond, the less significant the common bond becomes. And if there is no common bond, then the justification for the credit union charter disappears." Among the proposed changes, the NCUA plan would make it easier for credit unions to convert to community charters, and would redefine a "community" as any metropolitan statistical area (MSA) or political jurisdiction, regardless of size.
The ICBA also objected to a proposed change that would make it easier for credit unions to qualify for an "associational common bond." "The NCUA must ensure that the association is a legitimate group serving a legitimate purpose with bona fide members," Stone wrote.