Credit union trade associations quickly fired back.

NAFCU President/CEO Dan Berger wrote in a letter to Senate and House leaders that the NCUA's effort to streamline its chartering and FOM procedures is well within its statutory authority, and is also able to remove non-statutory constraints on FOM chartering and expansion.

The bankers' charged that the NCUA's proposal ignored two key phrases, well-defined and local, required by congressional statute. Specifically, the ABA and ICBA opposed the NCUA's use of the Office of Management and Budget's combined statistical area to qualify as a local community when allowing credit unions with community charters to expand.

“A region is not a local community,” the bankers' letter read. “For example, the Boise City-Mountain Home-Ontario, ID-OR combined statistical area would qualify as a well-defined local community under (the) NCUA's proposal. This combined statistical area crossing state borders encompasses eight counties with a land area of 23,135 square miles, which is larger than the land area of 10 states. To call this local is facially absurd.”

The trades also opposed the NCUA's proposal to allow congressional districts to count as a community. Doing so would allow credit unions to expand statewide in the seven states that only have one member of Congress.

“In rural America, congressional districts tend to cover large geographic areas (including many independent communities that actually are local and well-defined in and of themselves) creating highly tenuous bonds between potential members in the context of targeting federal tax benefits under federal statute,” the letter read.

Berger responded, writing, “While (the) NCUA's proposal recognizes new ways that credit unions can evidence why a particular area is well defined and local in applying for charter changes, it must be noted that these new avenues track other federal government recognition (such as U.S. Census or OMB) of these areas. Accordingly, (the) NCUA is merely recognizing areas that are already codified elsewhere in the federal government.”

CUNA Deputy Chief Advocacy Officer Elizabeth Eurgubian also responded to the letter, supporting the NCUA's proposal and saying it provides consumers with better access to financial services.

“The NCUA's rulemaking would merely allow more flexibility for federal credit unions to better serve the consumers in their communities,” she said. “Consumer access to financial services should be the goal of all financial services institutions. (The) NCUA falls well within its statutory authority for the proposed rule. The board's interpretation of the Federal Credit Union Act is reasonable and supported by the record. The allegations of the NCUA overstepping its bounds are simply unfounded. In fact, CUNA suggests the changes are quite modest and in fact could and could go much further.”

Berger also pressed the point of consumer access to financial services.

“It is remarkable (but not surprising) that the trades that represent the same industry that was caught redlining, engaged in risky lending that led to the financial crisis and has come to symbolize corporate greed on the campaign trail would attack efforts to make it easier for Americans to have access to low-cost, consumer friendly financial services provided by credit unions,” he wrote.

Comments on the field of membership rule, proposed on Nov. 19, are due to the NCUA by Feb. 8.