In a letter to boards of directors and CEOs, Rodney Hood, chair of the National Credit Union Administration, encouraged credit unions to expand their services to underserved areas.
“Expanding into underserved areas can also help diversify membership and increase a credit union’s lending opportunities,” Hood wrote in the letter. “Adding an underserved area to a federal credit union’s field of membership does not change the nature of a credit union’s charter. A multiple common bond federal credit union may add additional groups under the NCUA’s multiple common bond expansion options after being approved to expand service to an underserved area.”
The agency’s manual on chartering and fields of membership has instructions on how federal credit unions can apply to provide service to an underserved community. The process requires credit unions to develop and submit a business plan specifying how the credit union would serve an underserved community.
The NCUA also offers detailed guidance and a pro forma financial statement template for credit unions to use in their applications.
“The underserved area expansion option for multiple common bond federal charters has enabled millions of consumers to gain access to affordable financial services,” Hood wrote. “In view of the challenging environment we are all facing due to the pandemic, it is more important than ever to continue making credit union access available to the greatest extent possible.”