"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," he added.

Maloney, who has an MBA in finance, was attending graduate school when the credit union opened in the 1980s.

"My MBA thesis was on how to open a credit union to benefit a large family and that's what we did," said Maloney, who noted that the credit union model caught his attention since a commercial office was not needed.

"We're a confined field of membership. We're not about to increase the field of membership dramatically. You have to be related by birth, marriage or adoption to Patrick Maloney who came over from Ireland at the beginning of the Civil War – that's the field of membership," he added.

Maloney said home-based credit unions are what he called an expensive annoyance for the NCUA.

"We soak up their examination resources and pay little or nothing in fees," he said.

Maloney is not alone. Patricia Bartz, manager of the $544,192 Assumption Beaumont Federal Credit Union in Lumberton, Texas, said her credit union also could not afford to rent office 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, pointing out that her credit union is operated by volunteers.

"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."

Bartz said the NCUA proposed the rule as part of an effort to put small credit unions out of business.

"We're just very simple. We're a manual credit union. We're not computerized and you know, we just want to be left alone. This works for us and our members," she said. "We never wanted to be a big business – that was not the intent when this started. I think they're going to force us out. I think that's their whole intention."

Cecil Maloney, president of First Frontier, is directing his complaints over the rule to President Obama, who nominated NCUA Chairman Debbie Matz and Board Member Rick Metsger. Both Metsger and Matz voted for the proposed rule.

"I voted for President Obama…Here we have Obama leading this government and all these federal agencies are cracking down on the little people – why is that? I just don't understand it," he said. "I think he knows everything that's happening and it's breaking my heart to think that we may have to close down after 28 years of trying to do the right thing for people," he said.

Nicholas Albu, associate attorney at Woods Rogers law firm, which works with the Virginia Credit Union League, told CU Times there are security risks in both home-based credit unions and commercial offices.

"Practically speaking, there will always be security and privacy risks no matter where a credit union conducts its business," he said. "The NCUA appears to be concerned that sensitive information is more likely not to receive proper treatment if stored on the premises of a home-based credit union, resulting in an increased risk for improper disclosure and accidental destruction."

Both Maloney and Bartz said the NCUA's Office of Small Credit Union Initiatives has not contacted their credit unions about relocating, contrary to the text of the proposed rule.

Marilyn Sullins, manager of the $4 million Aldersgate Federal Credit Union in Danville, Ill., said in a comment letter to the NCUA the proposed rule would "remove small home-based credit unions from the collective credit union map."

"I've been contacting many of the credit unions that commented and there is not one that was ever contacted by OSCUI – not one," Maloney said.

"Nobody notified me and from what I'm hearing, I don't think they notified anybody," Bartz said. "I didn't find out about this until January 23rd when our league representative from Cornerstone called me about writing a letter."

According to the proposed rule introduced at the December board meeting, the NCUA began extensive efforts to encourage home-based credit unions to obtain commercial office space.

"NCUA's Office of Small Credit Union Initiatives has worked with NCUA's Regional Offices to identify home-based credit unions," said the proposed rule.

"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.

Maloney said some NCUA examiners have expressed that they prefer working in a house as opposed to an office.

"If you listen to that board meeting, they were making all these jokes about how all these credit unions are old or whatever and they're just waiting to die – I mean, that's pure BS. There's no backup to their anecdotal stories. There's no statistics, no numbers, no nothing," he said. "It's an inside joke to them that 'these credit unions are all dying and we're just going to finish them off.'"

Fable Griffin, president/CEO of the $341,887 Dallas IHC Federal Credit Union in Colleyville, Texas, said her credit union has not had any issues with examiners. "The cost to rent a facility is really going to impact us a lot. We're not paying anything except storage for the records," she said.

CU Times asked the NCUA if it had contacted every home-based credit union.

"We contacted every federally chartered credit union we could identify as home-based," said John Fairbanks, the agency's public affairs specialist.