Office of the Chairman

Statement of NCUA Chairman JoAnn Johnson Regarding Proposed Rule to Amend NCUA’s Chartering and Field of Membership Policies

In the Credit Union Membership Access Act, passed in 1998, Congress expressly recognized that multiple common bond credit unions would be authorized to serve persons or organizations within an area that was underserved.

We believe that the statutory language also reflects Congress’ intent to make clear that this new charter type was authorized to add underserved areas, not exclude the other two federal charter types from doing so, as the Bankers now arguing.  I believe this is supported by the legislative history and the fact at the time Congress enacted the Credit Union Membership Access Act, it was aware of NCUA’s long standing policy allowing all federal charters to serve communities and groups in need of additional financial services.

It is important to recognize that this proposed rule is being issued in the best interests of credit unions and their members.  Because of the uncertainty surrounding the current litigation, NCUA would be derelict if it did not take the action it takes today. Members of federal credit unions deserve no less. We recognize that the history of the statutory changes is subject to different interpretations, that this creates a level of uncertainty for non-multiple common-bond credit unions and their potential members, and that we should take reasonable steps to protect them in light of the litigation that has been initiated by representatives of the banking industry.

I would be remiss if I did not also point out the hypocrisy with which the bankers have dealt with this issue. On the one hand, they have consistently argued that credit unions are not adequately serving people of modest means.  On the other hand, they have filed lawsuits whose only reasonable outcome, should they prevail, would be to deny credit union services to those same potential members.