Monday, June 1, 2015

America First FCU Trying to Regain Communities It Previously Lost in Court Decision

The National Credit Union Administration (NCUA) in March and April approved applications of Riverdale, Utah-based America First FCU to add underserved areas located in Davis and Weber Counties of Utah aiding the credit union to regain communities it had previously lost.

As background, NCUA in 2003 granted America First FCU a six-county community charter serving Tooele, Salt Lake, Summit, Morgan, Weber, and Davis counties. The American Bankers Association (ABA) sued NCUA that the six counties did not constitute a local well-defined community.

A December 8, 2004 decision by Federal Judge Kimball stripped America First FCU of its six-county community charter finding no evidence that the community was local.

After the court decision, NCUA in early 2005 granted America First a new community charter for Salt Lake County.

But later in 2005 NCUA approved the adoption of several underserved areas by America First that allowed the credit union to regain portions of the area it had lost.

ABA in November 2005 sued NCUA in the same Federal court based on statutory language that specified that only multiple common bond credit unions could adopt underserved areas. NCUA promptly withdrew its underserved area approval for America First FCU.

The NCUA Board in June 2006 amended its underserved area field of membership policy, which limited underserved areas to multiple common bond credit unions.

According to a response to a Freedom of Information Act request, NCUA stated that the credit union switched from a community charter to a multiple common bond charter on August 21, 2014. However, America First's June 2012 profile on NCUA's website states that the field of membership type was multiple common bond.

By switching to a multiple common bond field of membership, the credit union was allowed to add these two underserved areas.

But this raises another issue -- the credit union still lists Salt Lake County as part of its field of membership. So, how is Salt Lake County still part of America First's field of membership, if it is a multiple common bond credit union?

Membership at federal credit unions is limited to one of the following common bonds -- single common bond credit union, multiple common bond credit union, or community credit union.


  1. "America first trying...?".
    America first did.
    NCUA to congress...I dare you to stop me from doing what I want to preserve my independence.
    Contingency lawsuits.
    Multiple FOM cheating.
    Low income designation.
    Charter change rules.

  2. For the life of me, I can not understand why anyone is upset at credit unions trying to serve underserved areas. It seems like good public policy in all aspects.

  3. My skepticism is directed at NCUA, America First was granted a community charter serving Salt Lake County in 2005. It switched to a multiple common bond charter in 2014. The Federal Credit Union Act does not allow federal credit unions to have a hybrid community and multiple common bond charter.



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