Tuesday, September 1, 2015

NCUA Board Should Follow Up on Community Charter Expansion

National Credit Union Administration (NCUA) Board Member J. Mark McWatters can score a blow for accountability and transparency by using the September 17, 2015 NCUA Board meeting to follow up on First Service Federal Credit Union’s community charter expansion that was granted in September 2014.

Last September, the NCUA Board approved First Service Federal Credit Union’s request to expand its community charter to include Delaware, Fairfield, Franklin, Licking, Madison, Morrow, Pickaway and Union Counties in Ohio.

However, during the September 2014 Board meeting, Board Member McWatters asked a series of questions of NCUA staff about what type of follow up the agency does to ensure that the credit union follows through on its commitments, especially to those people of modest means.

Below is the transcript of the exchange between Board Member McWatters and NCUA staffer Rita Woods.

J. Mark McWatters: What about follow up? There’s a request to expand field of service into other areas. What follow up do you guys do with respect to First Service, sticking with their promises of going into those areas, providing services, particularly to those of modest means?

Rita Woods: Yes. We will follow up with the credit union after a year of receiving approval of this request to make sure that they are following the plan that they provided to us and serving the residents in the Greater Columbus area as well as definitely reaching out to the underserved areas and doing as they said they would do in terms of, adding a service facility and increasing their marketing budget.

J. Mark McWatters: Okay. What if they don’t do what they say they’re going to do?

Rita Woods: Well, if they do not do what they say they’re going to do, then it’s possible that we could maybe look at having some type of administrative action in terms of whether or not they can continue to serve this area if they do not do what they say they’re going to do. But of course we’re going to give them the opportunity to do as they’ve indicated in their plan.

But if it deems that they will not abide by or comply with their plan, then we will take some kind of action to, perhaps, maybe even remove the area if they’re not going to serve it as they said that they would.

J. Mark McWatters: Okay. So if First Service makes a promise, makes a commitment to serve a certain area or for a certain type of person, persons of modest means, I know those words are easy to write, they’re more difficult to follow through with. So I would encourage you to follow through with that and make sure they’re exactly doing that. And if they’re not, then there needs to be some teeth in the remedy so the next time a person comes along asking for an expansion with promises that sound really great on paper, that they actually follow through. So that’s all my questions. Thank you.

I think it is in the public interest for the NCUA Board to evaluate if this credit union complied with its plan and that this deliberation be done in an open Board meeting.

1 comment:

  1. Oh. You mean accountability.
    In an industry with none.
    Otr.
    Contingency lawsuits.
    Behavior of some cu people, vendors and trade associations toward charter conversion.
    NCUA thumbing it's nose at congress with charter change rules and low income designation.

    ReplyDelete