Home-based credit union leaders told CU Times the NCUA's Office of Small Credit Union Initiatives did not contact them about relocating to a commercial space, contrary to the text of the proposed rule.
“NCUA began extensive efforts to encourage home-based credit unions to obtain commercial office space. NCUA's Office of Small Credit Union Initiatives (OSCUI) has worked with NCUA's Regional Offices to identify home-based credit unions,” said the proposed rule introduced at the December board meeting.
“OSCUI then contacted each of these credit unions to offer assistance in planning for the credit union's long- term viability, including obtaining office space. OSCUI also offered grants to support relocation of home-based credit unions holding the NCUA Low Income Designation. To date, no home-based credit union has taken advantage of these services,” the rule also said.
If approved, the rule would require home-based credit unions to purchase commercial office space.
“I've been contacting many of the credit unions that commented, and there is not one that was ever contacted by OSCUI – not one,” said Daniel Maloney, treasurer of the $449,099 First Frontier Federal Credit Union in Lynbrook, N.Y.
If the rule is ultimately approved, Maloney told CU Times his credit union would close, despite any potential assistance from the NCUA.
“If the rule comes into play, we're going to be shut down,” he said.“Our members are spread out all over the country. We have a couple in Mexico. We have guys that are active duty overseas. We don't need a brick and mortar building.”
Patricia Bartz of the $544,192 Assumption Beaumont Federal Credit Union in Lumberton, Texas, also said she was never contacted by the NCUA.
“Nobody notified me and from what I'm hearing, I don't think they notified anybody,” she said. “I didn't find out about this until Jan. 23rd when our league representative from Cornerstone called me about writing a letter.”
Bartz said her credit union, which is run by volunteers, does not do business every day and couldn't afford commercial space.
“We couldn't afford all those additional charges that would be put upon us just for the (examiner) to come two or three days a year. You know, it's ridiculous,” she said.
“We've got to have Internet service. We would have to have phone lines. You've got the utilities plus the rent for an office space and we don't have that much business to the point where we deal with it every day.”
CU Times asked the NCUA if they contacted every home-based credit union before proposing the rule.
“We contacted every federally chartered credit union we could identify as home-based. We made phone calls (though sometimes unanswered with no message machine), sent emails (when there was an email address available), and sent a postal notice,” wrote NCUA public affairs specialist John Fairbanks in an emailed response.
“We did not contact state-chartered credit unions, as the proposed regulation does not apply to them. Moreover, there is not a current requirement for a credit union to report it is home-based, so I cannot say it's not possible someone could have been missed for that reason,” he added.
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