Magazine article American Banker

Credit Unions for Entire Professions Authorized

Magazine article American Banker

Credit Unions for Entire Professions Authorized

Article excerpt

Seizing the offensive in its battle with banks, the National Credit Union Administration has made it easier for people to join credit unions.

The agency's rules, adopted unanimously Thursday, allow an occupation based credit union to serve an entire profession, rather than just employees at a single company.

In addition, credit unions with members at several local companies will be able to retain those members by converting to community-based institutions.

The rules came in a response to a July 30 federal appeals court ruling that said all members of a federal credit union must share a single, common bond. Enforcing that decision, a federal judge last month barred 3,586 occupation-based credit unions from adding new customers who don't share a common bond with core members.

"The board fully recognizes that this is not fixed, but this will substantially and significantly alleviate some of the pain caused by the ... decision," said NCUA Chairman Norman E. D'Amours.

Banking industry representatives were quick to criticize the rule as an end- run around the July decision in the AT&T Family Federal Credit Union case.

"This is a totally inappropriate role for a regulator," said Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America. "Their role is to uphold the law, and not be a cheerleader for the industry. The NCUA is trying to finagle its way around the very clear court decision."

NCUA officials claimed they are on solid legal ground. General Counsel Robert M. Fenner said according to the appeals court decision, the NCUA could adopt a more expansive definition of an occupation-based credit union.

"This rule is perfectly within the law as it is currently construed by the court of appeals decision, and totally defensible," he said.

Credit union executives said the changes will allow them to recover some of the member groups barred by the decision of the appellate court for the District of Columbia Circuit. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.