ALEXANDRIA, Va.—During NCUA’s open board meeting Thursday, the agency approved Charlotte Metro FCU’s request to expand its community charter—and in doing so announced that the CU may be the one of the last community charter applications to require NCUA board approval.
“I plan to seek a policy change that would streamline the community charter approval process,” said Matz, who said community charter approvals would be delegated to NCUA's Office of Consumer Protection. “Since we have well documented the standards that need to be met — and now that federal credit unions are consistently meeting those standards — I believe it is time to remove the NCUA board from the formal approval process.”
Doing so, Matz pointed out, also removes up to two months from the approval process.
“However, if staff deny a large community charter application, the board would reserve the right to vote on any appeal,” said Matz.
During the discussion on the Charlotte Metro CU expansion, board member Mark McWatters asked staff about what happens should a credit union not fulfill the promises it has made regarding serving the expanded FOM.
“We do give the credit union at least a year to meet their goals and projects outlined in business and marketing outline,” staff responded. “After a year we make a visit to assess whether management has actually met those goals. If not, we give them an opportunity to become compliant, and if they do not then we may take supervisory action in the way of perhaps even removing the community if they do not meet their goals. To date we have not had to take that action.”
Dennis Dollar, the former NCUA chairman who now leads a Birmingham, Ala.-based consulting firm that works with numerous CUs on field of membership issue, said the move is a good one by the agency.
“Streamlining the community charter approval process by removing the NCUA Board and delegating the final decision to the Office of Consumer Protection would be, to paraphrase Neil Armstong, a giant step for credit union-kind," said Dollar. "I commend Chairman Matz and the NCUA Board for moving in this progressive direction. The process is largely a compliance-based one for credit unions applying for a community charter. The OCP knows the compliance issues and regulations that are required, and their decisions are designed not to have a philosophical or political component to them. Appeals by a credit union to an OCP decision can go to the NCUA Board, but requiring a board vote on a compliant application that meets all regulatory requirements is unnecessary and only serves to add months to the approval process. This is an excellent move. I wish we’d done this while I was at NCUA.”