Stakes Growing In Battle Over Underserved Expansions

WASHINGTON (03/30/06) – Hundreds of credit unions are worrying that an NCUA roll-back in its rules on underserved expansions will jeopardize millions of dollars in new capital expansions and billions of dollars more in new loans and savings accruing in the nation’s low-and moderate-income neighborhoods.

The American Bankers Association is insisting that in order for it to drop its federal suit against NCUA the federal agency must bar the addition of any new members for some 200 credit unions in dozens of communities across the country, where NCUA virtually concedes those credit unions were allowed to expand illegally. “We don’t think they should be allowed to continue in what amounts to these illegal expansions,” Keith Leggett, senior economist for the ABA, told The Credit Union Journal. CUNA figures that at least 182 community chartered credit unions that have received underserved expansions, in apparent violation of the law, have invested more than $1.3 billion to bring financial services to underserved communities in the way of branches, ATMs and other service facilities. Those credit unions have added 1.6 million new members and made $4 billion in loans and collected $3.4 billion in savings in those communities. (CU Journal)