A former community development banker himself, Hood explained, "It is not and should not be a zero-sum game." The consumers are the pawns here, he pointed out. A row of representatives from American Bankers Association, which is suing the agency and has forced the rulemaking, sat at the back of the boardroom for the proceedings.

Without service "the underserved remain just that: underserved," he stated.

The other two board members expressed their displeasure with being forced into such a position, but stated that they believed the agency did not have the statutory authority to do anything else. "We believe that the statutory language Congress inserted was intended to make clear that this new charter type was authorized to add underserved areas, not to exclude the other two federal charter types from doing so," NCUA Chairman JoAnn Johnson said. "Unfortunately, Congress failed to insert language authorizing single common bond or community credit unions to serve underserved areas. This absence of statutory language creates uncertainty about their authority to do so."

"The issues presented by this IRPS have far-reaching implications for the viability of the federal credit union charter and for credit unions," NCUA Board Member Gigi Hyland commented. "I'm supporting the IRPS because after reviewing all the facts, the public comments and the law, I believe it is the only option available under the law as currently written."

Johnson added that she considered an alternative that would permit multiple common bond credit unions that adopt underserved areas to continue to serve those areas even after converting to a different charter. However, Johnson surmised that would "subject this new rule to a legal challenge with an uncertain outcome."

As it looked like the final IRPS would pass and before the final vote, the vice chairman offered an amendment that would have permitted multiple common bond credit unions to convert to other charter types while retaining their underserved areas if they had those areas for at least two years and also would have reinstated the "close proximity" language regarding the service facility. It died for lack of a second.

Hyland said that in her efforts to approve a rule balancing the statutory language and credit unions' investment in underserved areas, she concluded that legislative action was the only way to continue the agency's now former policy.

Given NCUA's prospective approach to the field of membership policy, the ABA provided no let up. President and CEO Edward L. Yingling said, "Unfortunately, NCUA has missed an opportunity to completely right its wrongs. While the agency has stopped future illegal `underserved' expansions, its rules allow credit unions to continue to add members from communities that were illegally annexed. They've locked the door but left the windows open."

He said there is still a fundamental problem of accountability for serving underserved areas. "If NCUA were serious about ensuring credit unions fulfill their mission of serving individuals of modest means, they would require credit unions to demonstrate, verifiably, their service to such individuals. Anything less is a failure of NCUA to carry out its regulatory duties," Yingling said.

He gave no indication of how the ABA would proceed with the lawsuit in Utah against the agency. [email protected]