NCUA Issues Moratorium On America First Underserved Areas

CU Times - December 29, 2005 - 09:07 AM

ALEXANDRIA, Va.—In response to a lawsuit filed Oct. 31 by the American Bankers Association, NCUA has placed a moratorium on America First Federal Credit Union’s service in its previously approved underserved areas, as well as the addition of underserved areas for all non-multiple common bond credit unions.

NCUA had approved the Utah credit union to serve a number of underserved areas that allowed it to regain much of its six-county community charter that the ABA successfully challenged.

"Providing financial services to people of modest means has always been an essential mission of credit unions. The NCUA Board continues to believe that a credit union's ability to provide service to underserved areas and to persons without access to financial services is critical to accomplishing this mission," NCUA said in a statement.

"Nevertheless, under the existing circumstances, the NCUA Board believes it prudent to withdraw these areas from America First's field of membership and to impose a moratorium on the addition of underserved areas to all non-multiple common-bond federal credit unions."

America First may continue serving its current members and the moratorium will remain in place until NCUA is finished reviewing its field of membership rules.