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ALEXANDRIA, Va.-NCUA Board Member Geoff Bacino has proposed the repeal of the Community Action Plan (CAP) as his recess term expires with the final recess of Congress. One senior official at the agency said it is a common belief around the halls of the agency that Bacino, with this move, is in effect trying to earn favor with the Republican administration and thus a permanent seat on the board. Bacino insisted that the timing of his proposal is not significant except that he has taken the year to review the matter. However, the unnamed official said that Bacino has taken the agency, which he says the current board has brought dignity to, and “mired it right back in the mud,” and that formal queries into the issue may be coming in the future. The CAP has taken a lot of heat from the credit union community and lawmakers as high as former Senate Banking Committee Chairman Phil Gramm (R-Texas) for attempting to impose CRA-like measures on credit unions, which congress specifically rejected. The decision on the future of CAP, scheduled to go into effect at years-end, will be made at the December 13th board meeting. Judging by statements made by NCUA Chairman Dennis Dollar, the motion will be seconded and CAP will be repealed. “After spending the last year studying this issue, looking at the numbers and discussing it with credit unions and NCUA staff, I have come to the conclusion that the regulation known as CAP is not needed,” Bacino said. He emphasized credit unions record setting year for underserved expansions and commented, “Obviously, credit unions understand the importance of offering service to all segments of the community.” Bacino added, “People in this office preceding me were very vocal about [extending service to the underserved] a priority,” He pointed out that the `less-is-more’ philosophy worked out with the streamlined expansion process and thus should work in this scenario. “These numbers bear out the fact that credit unions are not part of the problem, but rather are part of the solution.” Bacino stated. “Another goal that I always held high was the notion that NCUA doesn’t run credit unions. While CAP should not be viewed as a bad regulation, I view it as unnecessary and misguided.” NCUA Board Member Yolanda Wheat responded that the comparison of CAP to adding underserved areas proved that CAP was not overly burdensome. The record number of community charters approved this year, knowing they would be facing the CAP December 31, proves that point, she said. Additionally, she pointed out that community-chartered credit unions account for much of the credit unions adopting underserved areas. “Those people who argued vociferously that CAP would deter credit unions from adding underserved communities were dead wrong,” she said. Wheat added that CAP-like measures were specifically added to the House language of the Credit Union Membership Access Act as a requirement for being able to serve underserved areas without common bond requirements. Wheat also said she objects to the procedure Bacino is following. The proposal was actually filed as an interim final rule, rather than a proposed rule with public comment. “I don’t think we should underestimate how important public comment is to the process,” she said. Former NCUA Chairman Norm D’Amours had introduced similar proposals to CAP during his tenure on the board. All were defeated, with Wheat and then Board Member Dennis Dollar, voting against the proposals. D’Amours seconded the CAP, which was later introduced by Wheat, though D’Amours said he would like to see it go further. CAP would require community chartered credit unions to submit a plan of how they will serve the entire community. The program was initially approved as part of an amendment to the Field of Membership and Chartering Manual (IRPS 00-1). The entire proposal-which eased SEG applications, voluntary mergers, and streamlined the underserved area addition process-was popular with the credit union community, minus the CAP. The rule was approved, 2-1 over Dollar’s objection, at the October 2000 board meeting. Dollar’s opposition has been “very consistent on this issue in the four years I’ve been on the board,” the current chairman said. Since D’Amours departure and becoming acting chair, then the permanent chair, Dollar has vowed to repeal the regulation. The new chairman follows a `less-is-more’ strategy when it comes to regulation. He, too, pointed to the streamlined underserved area approval process and the record number of investment area additions as evidence that some regulatory requirements are simply impediments. He had been waiting to see if a second was possible to repeal the CAP before proposing it, which Bacino has now green-lighted by introducing it himself. “I commend him for his diligence of study,” Dollar said. “I am pleased with the outcome of his personal analysis.I’m not interested in credit. I’m interested in results.” Dollar said he expects a “spirited debate” at the upcoming board meeting, “but one of great decorum.” Credit union trade associations are also excited to see CAP back on the agenda. NAFCU President and CEO Fred Becker said he is glad of “the fact the regulator has decided not to legislate.” He added, “I congratulate Geoff for his leadership and willingness to do what’s right and we thank Dennis for his perseverance over the past year.” “Our newly approved Renaissance vision statements rightly note that credit unions have a tradition of reaching out to low-income members, a fact further evidenced by the latest figures from NCUA on field-of-membership expansion,” CUNA President and CEO Dan Mica said. “Credit unions do not need to be prodded by unnecessary regulation. That’s why CUNA and Chairman Dollar have long advocated the repeal of CAP. CUNA commends Board Member Bacino for placing it on the December meeting agenda.” CUNA Associate General Counsel Mary Dunn commented that had the CAP not been up for reconsideration, CUNA could have pursued “a very reluctant decision” to take the regulator to court. She noted that it works better this way for everyone in continuing with the trade groups Renaissance Commission efforts. Bacino’s recess appointment is scheduled to expire whenever Congress decides to adjourn, probably by December 20, according to NAFCU’s lobby team. Senate Majority Leader Tom Daschle’s office has already suggested former Agriculture Department official Deborah Matz as the sole Democratic member on the three-person board. Bacino still holds out the attitude that nothing is over until it is over. [email protected]

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