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ALEXANDRIA, Va. – About 50 credit unions and bank trades commented on NCUA’s proposal to limit the adoption of underserved areas to multiple common bond credit unions. The proposed regulation, stemming from a lawsuit brought by the American Bankers Association, would bar community and single-sponsor credit unions from adding underserved areas. The agency has asked for comment on whether that should be made retroactive. Additionally, if a multiple common bond credit union were to convert to a community charter, it would have to give up any underserved areas that are not within the proposed community. A moratorium is currently in place but a regulation would make the changes permanent. NCUA’s proposal also would require credit unions to establish a service facility within any underserved areas adopted in two years. Here are some excerpts of what a handful of commenters had to say: * “The final rule will do great harm to the reputation of CUs in general if they have to reverse course and pull out of serving underserved areas. The Public Relations efforts to inform members would be a nightmare.” Mike Vadala, The Summit FCU President & CEO * “For many years states have gone to great measures to ensure as much charter parity as possible. Actions by NCUA could put all federally chartered credit unions at an immediate competitive disadvantage, and may force many to convert to the charter option that will allow them to best serve their current and future membership. These proposed amendments, without hint of legislation, put the dual charter system in serious jeopardy.”-Richard Hein, OSU Federal President & CEO * “[T]he proposed rules do not appear to be designed to address known problems or issues with current law, legal precedents, or safety and soundness; rather the rules appear designed to eliminate legal challenges from bank trade and lobby groups.”-David E. Reynolds, Security Service FCU President & CEO * “I agree that NCUA should permit only multiple group credit unions to add underserved charter areas to their fields of membership. I believe that some credit unions are applying for underserved charters only to increase their revenue by opening offices where other credit unions are already available to serve the underserved for that particular area.”-Susan L. Hall, Empire FCU Director of Compliance * “Our current application to service an underserved area has been stalled based on NCUA’s request that we open a physical location in each county. Population doesn’t justify it and demographics don’t require it.”-Kent W. Moore, Mountain America FCU Senior Vice President * “As President/Treasurer of Peoples Federal Credit Union in West Virginia, a community chartered credit union which has received an underserved community into our field of membership an area that no other credit union has chosen to serve and an area that without PFCU would not have a chose of low or no cost financial services. PFCU has purchased property in the center of the county and is ready to construct a service facility pending the outcome of the current proposals.”-C.E. “Tom” Brewer, Peoples FCU CEO * “Once again, it appears the bankers are mandating who credit unions can serve and while it is extremely unfair I certainly understand the position NCUA has taken.While I understand the complexities of re-opening the Federal Credit Union Act at the moment it doesn’t appear that we would have any other choice than to go that route to fix this issue.”-W. Blake Strickland * “Credit unions have invested capital and human resources in anticipation of membership growth and serving those in the area and removing the lifeblood-potential members-would spell a certain death to those credit unions-exactly what the banking industry desires.”-Domenic DiPillo, Sun East FCU Vice President Marketing & e-Commerce * “I am sure that NCUA spent considerable time in reviewing the legal impact of its interpretation before [enacting] it, but it appears the agency is in retreat.Let’s effectively stop the bankers from writing credit union regulations by adhering to the original interpretation on this issue.”-William L. Spearman, Mid-Hudson Valley FCU CEO * “Over the years, as credit unions have matured and grown more sophisticated, I have seen an increasing momentum by credit unions to more fully serve those of more modest means. I fear that should the NCUA retrench from its encouragement of this direction, we will become just another money store.”-Patrick H. Volpe, Visions FCU Chairman * “In light of my experience and observation of community chartered credit unions in the Greenville, SC area though, SEG based credit unions would probably be a better choice to take care of underserved areas. We have three community chartered credit unions here and only one has an office in a designated underserved area and that is only because the office was there prior to their conversion. All three have opened new offices and they all put them in up-scale higher income areas.”-Mark W. Schmidt * “However, the statute is so clear on this issue and NCUA’s interpretation of CUMAA is so wrong that the NCUA has an obligation to retroactively review all of the applications by non-multiple common bond credit unions to add underserved areas since CUMAA was enacted and revoke those agency approvals that violated CUMAA. This should be done immediately to remedy any impact these decisions have had on other financial institutions. It is not enough for the agency just to change its rules prospectively.”-Christopher Cole, Independent Community Bankers of America Regulatory Counsel * “Once the data from [the service to modest means] pilot program is compiled and confirmed showing that credit unions are indeed serving all of their members, we feel NCUA, at the appropriate time, should seek clarification on Congress’ intentions to authorize all credit union charters to add underserved areas.”-Richard Williams, Member One FCU CEO [email protected]

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