The proposed size of the community is too small, the definition of rural is too arbitrary and the requirements on marketing plans are too burdensome. Those are among the most frequent complaints in comment letters about the NCUA's proposed rule to revamp the way the agency approves community charter applications.
The agency wants to designate a well- defined local community as one having 2.5 million or fewer people and have a core area containing 50% of the jobs and 33% of the population.
NAFCU Executive Vice President Dan Berger wrote that the numbers spelled out are "arbitrary and capricious" and noted that many areas would qualify as local communities but fail because they have more than 2.5 million people. He noted that of the 21 metropolitan statistical areas with more than 2.5 million people, 15 lack a city or county with at least 2.5 million people.
Vantage Credit Union President/CEO Hubert Hoosman wrote that as proposed "there is not one population hub in the state of Missouri that qualifies as a hub for a federal community charter which would exceed a political jurisdiction."
American Bankers Association Vice President and Chief Economist Keith Leggett wrote that the proposed expansion of a well-defined local community is "far beyond any reasonable definition of the term that is supported by the Federal Credit Union Act." He added that the proposed rule circumvents the mandate of the Credit Union Membership Access Act that field of membership boundaries should be limited
Another point of contention is the proposed definition of a rural district as a contiguous area in which more than 50% of the population lives in rural areas and the area's population doesn't exceed 100,000.
Pennsylvania Credit Union Association President/CEO James McCormack wrote that the definition "is unworkable and meaningless in Pennsylvania due to the demographics of the state. Almost every county or area that would qualify as rural has an urbanized area."
In addition, the NCUA is also seeking comments on its definition of an underserved area because currently an area can have many depository institutions, but the majority of them have products and services geared mainly toward businesses and higher income individuals.
NCUA Senior Vice President and Deputy General Counsel Mary Mitchell Dunn said the current rules "are cumbersome and need to be more flexible so more credit unions can apply to serve underserved areas."