CUNA Regulatory Comment Call

June 7, 2000

NCUA Board Seeks Comments on Proposed CRA-Like Requirements

(Major Proposal for Federal Community Credit Unions)

Community Reinvestment Act-type requirements for federal community credit unions are included in the package of field of membership policy changes the NCUA Board issued yesterday for a 60-day comment period. (A separate CUNA Regulatory Comment Call details the proposed field of membership policy improvements and other changes.)

CUNA is strongly opposing this amendment, and we urge all federal credit unions, not just community charters, that agree with this position to communicate your opposition to the proposal to the NCUA Board as quickly as possible. We would also welcome similar comments from state chartered credit unions. Comments should be addresses to NCUA Board Secretary Becky Baker, 1775 Duke Street, Alexandria, VA, 22314-3428. Please share a copy with us via email at or by fax at 202-371-8240. Also check the CUNA website for RegWatch and other documents describing the NCUA Board meeting June 6.

Even though federal community charters are the target of this proposal, many feel this could be the first step in CRA- type requirements for all federal credit unions.

Proposal Summary

The proposed amendments would require federal community credit unions to develop a separate community action plan (CAP) for marketing their services to the entire community, including underserved or low-income areas. Any type of application related to expanding, converting or chartering a community credit union would include a review of the CAP. Internal NCUA guidelines for examiners would require them to review the CAP periodically as well as in connection with applications, including the credit union's "overall effectiveness in meeting the goals outlined in the plan." If adopted, the CRA-like requirements would apply to new and existing federal community credit unions. Existing federal community credit unions would have until December 31, 2001 to put their plans into place. A federal community credit union's board would be expected on a periodic basis to evaluate the credit union's implementation of the plan.

Efforts to Combat the Proposal

NCUA Board Member Dennis Dollar made two valiant attempts to eliminate or separate the CRA-type proposal. Dollar read excerpts from a letter written to the NCUA Board by Senate Banking Committee Chairman Phil Gramm, urging the Board to back off from the CRA-type requirements. Despite Dollar's tenacity, he did not prevail, and the amendments are included in the bundle of proposed field of membership changes.

Following the Board meeting, CUNA President Dan Mica sharply criticized the provisions advanced by NCUA Board Chairman Norman D'Amours and Board Member Wheat. Quoting the proposal's own statement, "There is no evidence to support that community credit unions have failed to fulfill their responsibility to serve the entire community," Mica pointed out that the amendments were unfounded and would diminish the value of the federal charter.

CUNA General Counsel Eric Richard noted that other federal regulators that impose CRA requirements are executing statutory requirements mandated by Congress. "NCUA has no mandate, congressional or otherwise, to order these CRA requirements," Richard emphasized.

Another real concern about the proposed CRA-type requirements is that credit unions will not be able to review or comment on the examiner guidelines that will authorize them to review the CAPs and empower regional offices to impose sanctions.

CUNA has already begun working with key policymakers on the Hill and with officials at NCUA to try to improve and/or delay the CRA-like amendments. CUNA urges leagues and credit unions to weigh-in on these amendments, and let NCUA know they would be wasteful, needless, and contrary to the views of Congress.

For more information about the proposal, please contact CUNA Associate General Counsel Mary Dunn at

Eric Richard • General Counsel • (202) 508-6742 •
Mary Mitchell Dunn • SVP & Associate General Counsel • (202) 508-6736 •
Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 •
Catherine Orr • Senior Regulatory Counsel • (202) 508-6743 •