WASHINGTON-Five months ago, NCUA approved a regulation to permit credit unions to open branches on foreign soil, which became effective July 1. So far no credit unions have applied with NCUA for an overseas branch, according to NCUA Public Affairs Specialist Cherie Umbel, but some are venturing into the process. "There was always a finite number of credit unions interested in branching overseas," CUNA Senior Vice President for Regulatory Compliance and Associate General Counsel Kathy Thompson explained, adding that she was not surprised that no credit unions had applied yet. However, those few institutions expressed a very strong interest. The economy, she said, has likely dulled the would-be international brancher's taste because of the changing dynamics of their fields of membership, such as the unemployment rate hovering around 6%, and other effects of industry on the membership. Additionally, Thompson said the passage of the E-Sign Act could also have dampened credit unions' international spirit. "Electronically, I think they have found they can already provide those services," she said, without the expense of a brick and mortar location. Neither Thompson, nor NAFCU Director of Regulatory Compliance Linda Dent, can foresee any problematic compliance issues. "I think it's a simple process as far as submitting an application to NCUA," Dent said. But, working on a process without precedent can be a challenge, she pointed out. "[The credit unions] have to be thorough as far as what they are subject to and who is going to be reviewing them for what," she explained. It requires a lot of research and competent counsel prior to even determining if the credit union wants to begin the process. "It may be easier to sit back and let somebody else do the homework," Dent quipped. One credit union that is not willing to wait is United Nations Federal Credit Union. According to CEO John Lewis, the credit union already has four overseas liaison offices-two in Geneva, Switzerland, one in Vienna, Austria, and one in Nairobi, Kenya. The liaison offices give members a place to pick up information and loan and membership applications but do not provide any cash transactions. The credit union "is evaluating and determining which of those locations we'd like to elevate to a full branch," Lewis said. He explained that the credit union has not made any official contacts with NCUA or any foreign governments regarding placing a full-service branch overseas. Looking ahead to problems the institution may face, Lewis said that some countries do not have credit unions and must be educated. There is also the issue of working with their payment systems. Lewis commented that he did not find NCUA's regulation onerous at all at this point and emphasized that he would have fulfilled all the requirements anyway as part of the credit union's internal business plan. When asked about interest in overseas branching, State Department Federal Credit Union CEO Jan Roche said, "The pursuit there is very preliminary." For right now the credit union is serving its members abroad via the Internet and other electronic means, and they are still looking at if a need to open branches overseas exists. Though no decisions have been made yet at UNFCU, Lewis commented, "We're very pleased to have the flexibility to do overseas branching." [email protected]