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NCUA encourages qualified CUs to expand to underserved areas
The NCUA Friday encouraged credit unions to expand their services to underserved areas in a new Letter to Credit Unions. The agency noted that any federal credit union with a multiple common bond field of membership can include underserved communities, as defined by the Federal Credit Union Act, in its field of membership without regard to location.
“NAFCU appreciates the NCUA encouraging multiple common bond credit unions to expand their fields of membership to provide greater financial support to underserved communities as well as providing guidance for such expansions,” said NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt. “NAFCU believes all credit unions should have the ability to add underserved areas to their fields of membership and we will continue to advocate for Congress to make the legislative changes to do so.”
In the letter, Chairman Rodney Hood highlighted the NCUA’s Chartering and Field of Membership Manual, which describes how a federal credit union can apply for approval to provide service to an underserved community by developing and submitting a business plan that specifies how the credit union will serve the community.
“Expanding into underserved areas can also help diversify membership and increase a credit union’s lending opportunities,” wrote Hood. “Adding an underserved area to a federal credit union’s field of membership does not change the nature of a credit union’s charter.”
In addition, the NCUA has created detailed guidance on how to create the business plan needed to apply for approval, and created a pro forma financial statement template.
Read the agency’s full Letter to Credit Unions.