NCUA: Web Sites Not Reasonable Proximity for Common Bond FCUs

Credit unions cannot include their Web sites in the definition of service facility for multiple common bond federal credit unions, according to a recent NCUA legal opinion.NCUA General Counsel Robert M. Fenner wrote that the Federal Credit Union Act and agency regulations state that if such a credit union wants to add a new group to its field of membership it must be “within reasonable proximity to the location of the group.”He pointed out that to meet that requirement, a credit union must have a service facility near the group and an Internet Web site because it “lacks a physical presence” and is “not a service facility.”Fenner was responding to an inquiry from Ronald Burniske, president/CEO of Chartway Federal Credit Union in Virginia Beach, Va.

Marquis: Corporate CU Rescue IsThe Least Expensive Option

NCUA Executive Director David Marquis told approximately 3,800 participants in an agency Webcast that its plan for stabilizing corporate credit unions was the least expensive of the options and offered the most flexibility for a future dividend.He said the proposed premium, which will be used to shore up the NCUSIF, will only “significantly impact” less than 175 credit unions.The Feb. 12 Webcast focused on explaining the options the NCUA considered in determining how best to address the corporate stabilization program and explained their ramifications. In addition to Marquis, other participants included Acting Examination and Insurance Director John Kutchey, and Loss-Risk Analysis Officer Steve Farrar discussed the accounting and reserve issues related to stabilization. CLF President Owen Cole, Deputy Executive Director Larry Fazio and Office of Corporate Credit Union Director Scott Hunt then joined the discussion to help address some of the over 1,200 questions submitted by participants.Marquis noted that the agency is open to alternative proposals and that they are seeking input as it is undertakes a comprehensive look at the corporate credit union system. Comments on that are due at NCUA by April 6.All documents relating to the corporate stabilization plan are posted online at http://www.ncua.gov/CorporateStabilizationProgram.html.