Banking

Credit union regulator encourages underserved areas for federal charters

The National Credit Union Administration on Friday urged federal credit unions with multiple-common-bond fields of membership to add underserved communities to their FOMs.

The agency’s announcement, which came in a letter to credit unions, was released on the heels of an announcement from a Consumer Financial Protection Bureau task force that recommended Congress allow all credit unions to add underserved areas to their fields of membership in order to promote financial inclusion.

“Expanding into underserved areas can also help diversify membership and increase a credit union’s lending opportunities,” NCUA said in its letter. “Adding an underserved area to a federal credit union’s field of membership does not change the nature of a credit union’s charter. A multiple common-bond federal credit union may add additional groups under the NCUA’s multiple common bond expansion options after being approved to expand service to an underserved area.”

Financial inclusion has been a key prirotty for NCUA Chairman Rodney Hood, and the agency added in its letter that, “In view of the challenging environment we are all facing due to the pandemic, it is more important than ever to continue making credit union access available to the greatest extent possible.”

Despite a 2016 rule that expanded field-of-membership regulations, credit union groups continue to call on the agency to broaden its rules on field of membership. Jim Nussle, CEO of the Credit Union National Association, last year said Congress should amend the Federal Credit Union Act to eliminate FOM entirely.

NCUA also recently issued a proposal to loosen restrictions surrounding what counts as a service facility, which could make it easier for some credit unions to reach additional consumers.


Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button