Government Relations Call To Action
Credit Unions at it Again!!--CTA!!!
02/09/2021The NCUA has issued a proposal which would allow credit unions to use shared branches, shared ATMs, websites or mobile banking applications as a "service facility," which allows membership in those areas served by this technology and potentially opens them up to national fields of membership and provides credit unions with CRA coverage.
We need each of you to write a comment letter. Follow the link above to the proposal and click on the blue "Comment Now!" button at the upper right.
Here is some suggested language, but PLEASE edit it to be written in your own words!!
I am writing to express my strong opposition to the National Credit Union Administration's (NCUA) proposed rule to expand the field of membership for multiple common -bond credit unions. The proposed rule is yet another example of NCUA fueling the growth of the credit union industry at the expense of their congressional mandate to serve low-income and underserved communities.
In order to add a select group or underserved area to its field of membership, a multiple common bond credit union must establish and maintain a service facility within reasonable proximity of the group or in the underserved area. The need to establish a physical presence within geographic proximity to the proposed expansion is required by statute, and cannot be disregarded by the NCUA through rulemaking.
Nevertheless, the proposed rule would eviscerate the physical presence requirement by modifying the definition of service facility for select groups and underserved areas to include any shared branch, shared ATM, or shared electronic facility- regardless of whether the credit union is an owner of the shared branch network. In addition, the proposal would erase the distinction between service to select groups and service to underserved areas as delineated in the Federal Credit Union Act, undermining congressional intent to demand a heightened standard of in-person service for underserved communities. As a result, the proposal would enable significant field of membership expansion while diluting the physical presence of credit unions in the communities that need it most.
It is clear that the proposed rule opens up multiple opportunities for credit unions, but it would also negatively affect the availability of financial services in underserved areas, including low-to-moderate income (LMI) communities, by reducing the access to deposit and lending services at service facilities. Underserved communities need service facilities that can accept shares for members' accounts, accept loan applications, and disburse loans. An ATM provides none of these services, yet the NCUA proposal allows ATMs to qualify as service facilities. Credit union members- especially in underserved communities- rely on, value, and expect individualized communications and conversation with credit union staff who can respond to their specific needs. An ATM or the availability of remote services does not provide the same level of personal touch provided by in person staff.
I am equally alarmed that NCUA's proposal considers counting the websites and mobile banking applications of credit unions as service facilities. Congress intended for credit unions to have and maintain a local presence in the communities they serve. Counting online presence as a "service facility" would pave the way for national online credit unions that would devalue, dilute, and ultimately dissolve the common bond.
Abandonment of credit unions' statutorily mandated physical presence and common bond requirements destroys the nexus between the credit union charter and the federally subsidized mission to provide financial services to underserved communities and people of modest means. NCUA does not have the authority to re-write the Federal Credit Union Act in this way, and every step they take away from that statutory mission undermines the tax-exempt status of the credit union charter.
NCUA should withdraw this proposal in its entirety.