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ALEXANDRIA, Va.-Those who felt the Utah community charter lawsuit could have a chilling effect on large community charter conversions have found the last 11 months downright icy. But, in NCUA Board Member Debbie Matz’ last appearance behind the large conference table on the seventh floor at 1775 Duke St, the two-member NCUA Board approved its first community charter conversion in nearly a year. West-Aircomm Federal Credit Union was the first to dip their toes in the water and NCUA decided they were ready to dive in, approving the institution to serve Allegheny, Beaver, and Butler Counties in Pennsylvania with a population of over 1.6 million. West-Aircomm, now serving a community covering large pockets of underserved areas, already offers products like $250 Visa cards, risk-based loans, and financial planning. Though Matz raised concerns that the credit union offered courtesy pay, NCUA Region II Director Ed Dupcak assured her they were doing so in an innovative manner. According to NCUA Insurance Analyst Kerry Murphy, West-Aircomm allows six free transfers from savings to cover overdrafts before charging $25. They only allow members up to $600 for 30 days maximum and have a program for members to pay back the $600 interest-free over four months. Then, the member must go through financial counseling before they are permitted to use the product again. The credit union also plans to enter the business lending market, which is an area where they have identified a need. Particularly, NCUA Chairman JoAnn Johnson pointed out, “They are targeting businesses with 50 employees or fewer.” Murphy said they are limiting their business loans to $250,000. The chairman also noted that the agency needs to look into allowing a subset of a previously board approved large community charter to be handled at the regional level; this one covered three of 10 counties approved last year for Clearview Federal Credit Union. In a prior rulemaking, NCUA permitted regional directors to approve large communities already given the green light by the board. The NCUA Board issued a final rule authorizing wholly-owned credit union service organizations to not perform its own annual financial statement audit from a certified public accountant if it is included in its parent federal credit union’s annual consolidated audit. Public comment supported this move and asked that majority-owned CUSOs be granted the same status as permitted by generally accepted accounting principles. However, NCUA Associate General Counsel Sheila Albin said the agency decided the interest of the minority investors outweighed consolidation efforts. The final rule, which impacts 559 CUSOs as of June 30, is unchanged from the proposal. A proposed rule streamlining credit unions’ 5300 Call Report process was issued for a 60-day public comment period by the board. Currently, credit unions under $10 million in assets have the option of filing an abbreviated form the first and third quarters of the year. The proposal revises the regular and short forms into one form for all credit unions for efficiency, ease in maintenance, and cost reduction in printing and mailing. The new form will be 16 pages as opposed to 19, but will include 10 mandatory pages as opposed to seven that were in the short form. The additional information will include indirect lending, loan participations, member business lending, mortgage-backed investments and other data. According to Director of Risk Management Larry Fazio, the plan has been tested with a cross-section of credit unions and worked well. If approved in final form, the new Call Report will be implemented in Sept. 2006. Upon adjourning the meeting, Johnson recognized Matz’ service at NCUA. She told board meeting attendees “what a pleasure it has been to work with Ms. Matz. We have been able to accomplish a good deal together.” The dynamic duo went through Senate confirmation hearings together and, almost as soon as they came on board, worked together to broaden NCUA’s business lending regulations. Matz commented on how quickly her 40 board meetings have passed. “It’s as exciting and exhilarating as the first one,” she said. In her farewell, Matz said, “Credit unions are strong and safe and sound and have a positive future ahead of them. I’d like to think I’ve contributed to that in some small way.” -

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