The American Consumer Council (ACC) revealed this month that the National Credit Union Administration (NCUA) has for nearly a year been conducting a “quality control review” of the organization and other associations that partner with federal credit unions for purposes of growing membership. NCUA’s review comes after ABA advocacy last year.
In a July 8, 2013 letter to NCUA, ABA pointed out that almost 50 FCUs were allowing anyone to join through ACC. ABA wrote: “These federal credit unions have partnered with ACC for the express purpose of qualifying individuals who otherwise are ineligible for credit union membership.”
NCUA is reviewing ACC to see whether it complies with the agency’s “totality of the circumstances” test for associational common bonds.
During the review period, NCUA has not acted on between 12 and 15 applications from credit unions to add ACC as an associational select employee group. According to ACC, thousands of people who are otherwise ineligible for credit union membership have been blocked from joining during the audit.
The fact that NCUA is conducting this review is frustrating ACC.
Thomas Hinton, president of ACC, told members at the association’s June annual meeting, “For the past ten months, ACC has voluntarily responded to every question asked of us by the NCUA in an effort to demonstrate our full compliance with their associational SEG requirements."
He goes on to say: "It should not be the purview of the NCUA to dictate to ACC how we manage or operate our association. That is the Board of Director’s purview."
While Hinton is correct in saying that NCUA should not dictate how the association is managed or operated, it is NCUA's responsibility to see if the association meets the associational common bond requirements.
As NCUA's Chartering and Field of Membership Manual states, "[t]he common bond for an associational group cannot be established simply on the basis that the association exists."
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it is very interesting to note, as a director of a large credit union, that credit unions:
ReplyDeletewant supplemental capital, just like banks.
want the same small business lending capacity as banks.
cheat on the field of membership rules.
claim to be more consumer friendly than banks as justification for the "bank-like" powers...even though the fees members pay for bounced checks are essentially the same and what we pay on deposit is actually less than what banks pay (despite cuna's claims the contrary).
we really should have modernized regulations and powers and its more cleaar than ever that it could start to hurt the best credit unions.
yet we cling to the tax exemption in a death grip.
and thats just what it is..a death grip.