NCUA Board Chairman JoAnn Johnson said there are "long-term benefits that outweigh the anxiety raised" by some credit unions and their trade associations about regulatory burden.

She and NCUA Board Member Gigi Hyland voted for the policy changes and while Hood opposed them.

Hyland, who chaired the task force, said the data will help NCUA better inform supporters of the credit unions about the good work that they do.

Hood said approving the amendments was "ill-advised and poorly timed" in light of the burdens that the current economic slowdown are placing on credit unions. He said NCUA should marshal its resources to help credit unions better serve their members. He added that the rules change would be imposing "CRA-lite burdens on credit unions."

The Community Reinvestment Act requires banks to demonstrate that they are providing services to underserved populations. The act does not apply to credit unions, which are subject to the Federal Credit Union Act, which mandates their work in low-income areas or those with large minority populations.

Johnson said the additional data reporting requirement about financial services they provide "will only require at most 23 additional clicks on the computer, if they offer all possible services."

Hyland said the purpose of collecting data will be "informative, not punitive."

Moisette I. Green, an NCUA lawyer who worked on the task force report, told the board that the data "will facilitate outreach efforts" and there will be little additional burden on individual federal credit unions.

Green also said NCUA officials would not use the data collected to make a decision about whether a credit union would be designated a low-income credit union. But she added that examining the data "might trigger further review" of that status. Low-income credit unions are permitted to obtain low-cost loans and grants from the Community Development Revolving Loan Fund and raise secondary capital.

NAFCU President Fred Becker said in a phone interview after the meeting that he remained unconvinced of the need for the rules change. He said any increased compliance costs will be harmful to federal credit unions because "the regulatory burden is already higher than at any time in American history."

Becker added that NCUA doesn't need to compile additional data because the existing information shows that "credit unions are clearly outperforming banks and thrifts when it comes to serving underserved populations."

In a statement after the board vote, CUNA President/CEO Dan Mica said, "We remain unconvinced that a 'data collection' process is necessary. In fact, the position taken by Vice Chairman Hood, in explaining his opposition to the data collection program, reflects the movement's concerns including those raised by credit unions, the leagues and CUNA about aspects of the initiative and its timing, given the poor economy."

But Mica went on to say that the NUCA board had acted on several of CUNA's concerns, such as assuring credit unions that examiners will not be able to use the data to create report cards on individual credit unions, delaying the start of the program until the beginning of next year, and extending the program over a 24-month period.

"Still, many credit unions have expressed to us their own concerns about data collection," Mica said, "and it is our intention to recognize and honor their apprehensions. We will carefully monitor the development of this program."

The board created the task force, which produced the recommendations on data collection, as a result of concerns raised by Congress and its Government Accountability Office about how well credit unions were serving the underserved; the report also recommended collecting executive compensation data for distribution, which was not considered by the board at its May 22 meeting. Some of the trade associations and credit unions said some of NCUA rules changes in this area exceeded its statutory authority.

Hyland asked Green whether the agency has responsibilities beyond just insuring the safety and soundness of credit unions.

Green said the statute is clear that NCUA has a role beyond that, which includes regulation and consumer protection and these rules fall in that area.

She added that while it is true that Congress "has not imposed requirements that data be collected, the agency is within its rights to do so."

At Thursday's meeting, the board also gave preliminary approval to changes in the credit union chartering process that clarifies the procedures for determining whether an "underserved area" qualifies as a "local community."

The proposal, which is now subject to a 60-day comment period, also addresses how certain economic and demographic data can be used to determine if an area that combines geographic units qualifies as underserved. They also clarify data needed to show that a proposed area has "significant unmet needs for financial services."

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