Thursday, July 6, 2017

Black Hills FCU's Gerrymandered Rural District Charter

Black Hills Federal Credit Union (Rapid City, SD) is using the rural district loophole to connect South Dakota's two largest distinct metropolitan areas by population size. One metropolitan area is in the eastern part of the state and the other is in the western part of the state.

The credit union has used the rural district geographic common-bond to expand its footprint across the state on three different occasions.

In March 2011, the National Credit Union Administration (NCUA) granted Black Hill'a rural district community charter serving the South Dakota counties of Pennington, Meade, Haakon, Hughes, or Stanley.

In July 2015, NCUA approved a second expansion of Black Hills' rural district adding the counties of Butte, Buffalo, Hyde, Jerauld, Lincoln, McCook, Miner, Sanborn, Sully, or Turner.

In May 2017, NCUA approved an expansion of a rural district community common-bond for Black Hills Federal Credit Union (Rapid City, SD) to include Minnehaha County, the state's most populous county.

The addition of Minnehaha County raised the potential population for this rural district to 431,701, as Black Hills FCU exploits NCUA's recently amended field of membership final rule that raised the population threshold for a rural district from 250,000 to 1 million.

This rural district snakes its way across South Dakota from the Montana-Wyoming border to the Minnesota-Iowa border.

This rural district includes three core-based statistical areas -- two metropolitan statistical areas and a micropolitan statistical area.

Each of these core-based statistical areas are distinct well-defined local communities.

Almost 95 percent of the people living in this rural district reside in the three core-based statistical areas.

It appears that the credit union is using rural counties to create a bridge from one metro area to another metro area.

In fact, Black Hills FCU does not have a branch in truly rural counties, such as Haakon, Buffalo, Butte, Jerauld, Hyde, Miner, and Sanborn. However, according to its current profile, the credit union has already opened a branch in Minnehaha County, which it just added.

This gerrymandered rural district is rural in name only. NCUA's decision to approve this rural district is arbitrary and capricious.

2 comments:

  1. It most certainly is.

    ReplyDelete
  2. I switched to my credit union from a local bank because the bank spent more time, money, and resources complaining about credit unions than it did trying to provide the best products and services. Also, I miss your point on the credit union not having branches in "truly rural counties." It's 2017, brick and mortar branches are becoming a thing of the past. With your argument, it seems as if you are more so just complaining about the competition. Not much here of substance.

    ReplyDelete

 

The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.