Home-based credit union leaders told CU Times theNCUA's Office of Small Credit Union Initiatives did not contactthem about relocating to a commercial space, contrary to the textof the proposed rule.

“NCUA began extensive efforts to encourage home-based creditunions to obtain commercial office space. NCUA's Office of SmallCredit Union Initiatives (OSCUI) has worked with NCUA's RegionalOffices to identify home-based credit unions,” said the proposedrule introduced at the December board meeting.

“OSCUI then contacted each of these credit unions to offerassistance in planning for the credit union's long- term viability,including obtaining office space. OSCUI also offered grants tosupport relocation of home-based credit unions holding the NCUA LowIncome Designation. To date, no home-based credit union has takenadvantage of these services,” the rule also said.

If approved, the rule would require home-based credit unions topurchase commercial office space.

“I've been contacting many of the credit unions that commented,and there is not one that was ever contacted by OSCUI – not one,”said Daniel Maloney, treasurer of the $449,099 First FrontierFederal Credit Union in Lynbrook, N.Y.

If the rule is ultimately approved, Maloney told CUTimes his credit union would close, despite any potentialassistance from the NCUA.

“If the rule comes into play, we're going to be shut down,” hesaid.“Our members are spread out all over the country. We have acouple in Mexico. We have guys that are active duty overseas. Wedon't need a brick and mortar building.”

Patricia Bartz of the $544,192 Assumption Beaumont FederalCredit Union in Lumberton, Texas, also said she was never contactedby the NCUA.

“Nobody notified me and from what I'm hearing, I don't thinkthey notified anybody,” she said. “I didn't find out about thisuntil Jan. 23^rd when our league representative fromCornerstone called me about writing a letter.”

Bartz said her credit union, which is run by volunteers, doesnot do business every day and couldn't afford commercial space.

“We couldn't afford all those additional charges that would beput upon us just for the (examiner) to come two or three days ayear. You know, it's ridiculous,” she said.

“We've got to have Internet service. We would have to have phonelines. You've got the utilities plus the rent for an office spaceand we don't have that much business to the point where we dealwith it every day.”

CU Times asked the NCUA if they contacted every home-based credit union beforeproposing the rule.

“We contacted every federally chartered credit union we couldidentify as home-based. We made phone calls (thoughsometimes unanswered with no message machine), sent emails (whenthere was an email address available), and sent a postal notice,”wrote NCUA public affairs specialist John Fairbanks in an emailedresponse.

“We did not contact state-chartered credit unions, as theproposed regulation does not apply to them. Moreover, thereis not a current requirement for a credit union to report it ishome-based, so I cannot say it's not possible someone could havebeen missed for that reason,” he added.