The National Credit Union Administration decided to count military personnel in determining whether a credit union qualifies for a low-income designation without using the regulatory process required by law, the trade group representing the nation’s community bankers charged this week in a letter to the NCUA’s Inspector General.
In her letter, Independent Community Bankers of America President/CEO Rebeca Romero Rainey called on the IG to begin an investigation into whether the agency violated the Administrative Procedures Act, which requires that proposed rule changes must be open to public comment before they are adopted.
The agency’s decision earlier this month to count military personnel in the low-income designation opens credit unions that qualify to a variety of benefits, including an exclusion from the Member Business Lending cap. Agency officials said that active-duty military personnel constitute a highly mobile population and that many servicemembers list Army/Post Office or Fleet Post Office mailing addresses.
In her letter, Romero Rainey said that the agency did not address any of the traditional public policy goals behind rulemaking, including the need for the rule, the effective date, the legal authority, or the impact on small entities.She charged that the agency’s decision would benefit the largest credit unions at the expense of the smallest.
In a letter to credit unions this week, NCUA Chairman Rodney Hood said that the agency’s Office of Chief Economist has determined that the majority of military personnel would qualify as low-income members. “The NCUA is always seeking opportunities to foster greater financial inclusion, accessibility, and opportunity for all Americans,” he wrote. “To that end, the NCUA’s goal in improving the low-income designation methodology is to ensure full financial inclusion for the men and women serving in our nation’s military.”
CUNA President/CEO Jim Nussle said he was disappointed with ICBA’s request for an investigation. “It’s incredibly disheartening that bankers would try to prevent our brave men and women in uniform from accessing the services of low-income credit unions,” he said.