NCUA Should Revisit Rural Definition, NAFCU Urges
NAFCU wants the NCUA to take another look at how it defines rural areas for credit unions seeking community charters.
In a Thursday letter, the association expressed the concern that the agency's definition of rural areas for community charter evaluations is too restrictive.
“In defining the term, however, the NCUA has painted with one brush a rural America that cannot be viewed in singular terms,” NAFCU wrote in its letter to the agency.
“While the current definition may be appropriate in many cases, it has proven too restrictive in others. Accordingly, we strongly recommend that the NCUA supplements the definition to include other ways that a credit union may satisfy the agency’s regulations,” the letter said.
The association particularly attacked the agency's use of what it called arbitrary population numbers as part of the definition.
“[T]he agency should increase the current population thresholds of 200,000 and 100 person per square mile limits as both are far too low,” the association added. “We note that previously, the NCUA’s population limit for rural district was 500,000; thus, with the 2010 changes, effectively, the agency decided that a ‘rural district’ is actually 60% smaller in population than it previously thought. This fact, in and of itself, is troubling.
“NAFCU believes that both the 100 people per square mile and the 200,000 people limit are arbitrary and do not pass even a cursory review of our nation’s makeup. For example, there are many rural areas that would, by any reasonable measure, be regarded as rural but would fail because of the NCUA limit,” the association added.