CIF contributions may be included in community charter's documentation

ALEXANDRIA, Va.-In a legal opinion letter, NCUA stated that if a community chartered federal credit union can demonstrate that the National Credit Union Foundation’s (NCUF) Community Investment Fund (CIF) helps the credit union serve the underserved, portions of its community contributions made can be used in documentation of the credit union’s efforts. In a controversial battle last year, the community action plan (CAP) passed as part of a package of amendments to the NCUA’s Field of Membership and Chartering Manual. CAP author and NCUA Board Member Yolanda Wheat and former Chairman Norman D’Amours voted in favor of the package. Dennis Dollar voted against the package, which also added an Internet application process among other streamlining features, solely because of the CAP. NCUA Associate General Counsel Sheila Albin quoted the chartering manual in the agency’s opinion letter, “An existing community credit union, and any applicant for a community charter must specifically address in its business plan, marketing plan, or other appropriate separate documentation how the credit union plans to market its products and services to the entire community, including any underserved or low-income areas, if applicable.” The NCUF is a private organization that receives part of a credit union’s dividends earned from investments in a CIF account. NCUF uses the CIF dividends it earns to help pay for programs that aid service to the underserved. “Although the Chartering Manual does not identify investments as an example of a way community chartered credit unions may meet the requirement of marketing to the entire community,” Albin wrote, “our view is that the examples are illustrative, not exclusive.” Considering examples provided in regulations as “illustrative, not exclusive” has been a recent trend in agency thinking. Recently, the regulation on CUSO authorities and federal credit union’s incidental powers have been in this spirit. The CAP amendment to the chartering manual, opposed by the credit union trades and Dollar, even raised the eyebrows of Senator Phil Gramm (R-Texas), then-Banking Committee Chairman, who swore to have the Community Reinvestment-like regulation legislatively overturned if the agency could not do the job itself. With the addition of newest NCUA Board Member Geoff Bacino and Dollar’s acting chairmanship, the CAP is expected to be overturned. CAP goes into effect Jan. 1, 2002. [email protected]