When The Finest Federal Credit Union opened its doors May 13,the gala ribbon-cutting ceremony included NCUA Chairman DebbieMatz. It was the first credit union ever formed to serve the nearly75,000 employees of federal, state, county and municipal agenciesor departments engaged in police protection in the city of NewYork.

Keith Stone, president/CEO of The Finest FCU, is optimisticabout its future. But the financial industry veteran also was thefirst to say that the road to launching the year's first new creditunion was anything but smooth.

“The actual planning of the credit union started in 2007, butthe recession killed off the funding and we couldn't move ahead,”Stone said.

The new federally chartered credit union was subject to therigors and requirements of NCUA. Although opinions differ, theagency maintains that the process for chartering a credit union hasnot become more complicated in recent years, according to RobertLeonard, director of consumer access in the NCUA's Office ofConsumer Protection.

“The requirements have remained steady over time,” Leonard said.“New charters require a field of membership that qualifies withfederal chartering policy, the organizers must be of soundcharacter and represent the members, and organizers must presentsatisfactory business and marketing plans showing that the creditunion will be viable and sustainable over time.”

However, there are multiple steps within each one of thoseseemingly straightforward requirements that can significantlycomplicate the chartering process, say those who have undergone theexercise. Moreover, Leonard's summary says nothing about thegrowing mountain of regulations new credit unions face to whichtheir predecessors from a decade earlier were not subject,according to Ron McLean, senior vice president and spokesman for the CreditUnion Association of New York.

“Chartering a credit union certainly has become more difficultin the past decade as the complexity involved in operating a creditunion has increased significantly,” McLean said. “Regulations aloneand the increased regulatory burden make operating a credit unionmore challenging for the staff, leadership and board for a newlychartered credit union.”

CUANY provided organizational assistance to The Finest FCU,McLean explained. The state trade association began working withthe newly chartered credit union months ago, primarily providingcompliance and consulting assistance.

The NCUA also offers help to new credit unions seekingchartering support through its Office of Small Credit Union Initiatives, Leonard added.Despite such assistance, however, the majority of new credit unionapplicants never make it to the chartering stage.

“At any given time we have about 20 applications in the pipelineand only two or three of those applicants get chartered, so about80% don't make it,” Leonard said. “A lot of times applicants don'trealize how much time and effort is spent running aninstitution.”

CUANY's McLean agreed: “The bottom line is that it's a majorundertaking to charter a new credit union. It requires a lot ofvision and commitment from individuals for that dream of a newcredit union to become a reality.”