ATLANTA -- Georgia credit unions have moved cautiously regardingresidential common bond charters even though a 2005 state lawchange gave them the flexibility to do so.

According to the Georgia Department of Banking and Finance, 25credit unions have been approved to serve a neighborhood, communityor rural district, which can also include a municipality or county.Nearly a dozen of the approvals came this year. The department isaveraging one residential common bond application a month, saidGeorge Reynolds, senior deputy commissioner at GDBF and chairman ofNASCUS.

"We've had a fairly level number of applications for eachmonth," Reynolds said. "The numbers [for 2008] might be a bitdeceptive. One of our senior staffers is retiring, and some of thecredit unions wanted to get their applications in before heretired."

In 2005, Georgia Gov. Sonny Perdue signed Senate Bill 82, whichmodernized the state's Credit Union Act for the first time since1974. Among the key provisions was a clarification that an existingcredit union's field of membership can be composed of multiplegroups, including communities, associations and occupationalgroups. Georgia Credit Union Affiliates was instrumental ingathering research to codify the act, including hiring a lobbyist,identifying a sponsor of the Senate bill and even meeting with thestate's banking associations.

"As with any change in existing laws and rules, it can take awhile for credit unions to see exactly how they can benefit. Ascredit unions warmed up to the growth opportunities availablethrough adding residential groups, more began to make the change,"said Anita Paul, director of communications at GCUA.

The $1.5 billion Atlanta Postal Credit Union was approved inFebruary for a residential common bond to serve Bibb County, Ga.The Macon area is not new to the credit union as it has served theU.S. Postal Service and federal government employees in two zipcodes since 1991, according to Dianne Yost, vice president ofmarketing at Atlanta Postal. In September 2007, the credit unionrelocated to a bigger facility in downtown Macon. The newly grantedbond is one more extension of its 83-year reach to postalemployees.

"It is not our goal to expand outside of who we are," Yost said."We are a postal credit union, and that's what we will continue tobe."

Cutting ties with its longtime sponsor Atlanta-based EmoryUniversity was not even an option for $92 million Emory AllianceCU, which was approved for a residential common bond in June, saidChris Culberson, president/CEO. Before applying, the credit unionfirst had to switch from a federal to a state charter. Doing sowould allow Emory Alliance to serve residential and occupational,Culberson noted. Going community charter would have meant giving upEmory University, a private university founded in 1836 with 12,000students and 3,000 faculty members.

"They are a strong sponsor and not likely to go out ofbusiness," Culberson said. "Emory has a lot of affiliates and weserve those affiliates as well. Under a federal charter, we wouldhave had to give up Emory [when applying for the residential commonbond]."

Emory Alliance was approved to serve DeKalb County, one of thelargest counties in Georgia. The university sits right on theDeKalb/Fulton county lines and with many Emory students living inDeKalb, the expansion was the right move, Culberson said. Thecredit union is looking at other Georgia counties where EmoryUniversity has a presence including in Newton County, which is hometo Oxford College, a two-year undergraduate division on theschool's original campus in Oxford, Ga.

"In today's environment, credit unions have so many communities,it's very difficult to be a single common bond," Culberson said.Everyone out there could potentially be your members. Our memberscan join a number of credit unions."

Still, Culberson said a credit union's size is not an issuebecause they're still small players in a huge and competitivefinancial services marketplace.

"The biggest competition is clearly large banks and communitybanks. No [credit union] would welcome an attack on their group butat the same time, everyone is trying to grow," Culberson said.

Reynolds at Georgia's DBF said the department has seen two typesof residential common bond requests: smaller credit unionsinterested in serving a common bond of residents in a primarycounty, and a few other larger credit unions that have applied formultiple common bonds such as the $2.5 billion Delta Community CU.Select employee group applications are still the most popularrequests from Georgia credit unions, he pointed out.

"Each common bond they have applied for has to stand on itsown," Reynolds said. "We had the credit union codification in 2005,and it made clear in the statute that credit unions could havemultiple common bonds."

Indeed, in their residential common bond applications, creditunions are required to establish "well-defined" criteria for aneighborhood, community or rural district and delineated on a map.Within that definition, the parameters for defining a neighborhood,community and a rural district take into consideration factors suchas the credit union's financial and managerial capacity to servethe proposed common bond and projection of the expected size andpenetration into the target market over a three-year period,according to Georgia's DBF.

GCUA said the work that went into modernizing the Georgia CreditUnion Act was well worth it to at least give the state's creditunions another option to reach more potential members.

"In 2004, the Georgia league visited credit unions across thestate to get their input about the Georgia Credit Union Act and itsimplementing rules. The response of the credit union leaders was tohave more opportunities for credit unions to grow," Paul said.

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