NCUA News Release

April 4, 2003, Norfolk, Va.—NCUA Vice Chair JoAnn Johnson, addressing the Virginia Credit Union League’s 69th Annual Meeting, today presented attendees with a bright assessment of credit union growth nationally and their role in maintaining and building a healthy economy. She also updated attendees on the recent action by the NCUA Board of finalizing NCUA’s Chartering and Field of Membership Manual and proposed changes to the member business loan rule.

Johnson explained that the new chartering and field of membership changes standardize what constitutes a local community, offer a new trade, industry and profession option for single common bond credit unions, and make other improvements to the rule to ensure the federal charter remains a viable, safe and sound option within the dual chartering system.

In highlighting the field of membership changes, Johnson said, “I believe an effective dual chartering system requires both a strong federal and state system that provides for innovation by state and federally chartered credit unions. This rule utilizes NCUA’s four years of experience in implementing the Credit Union Membership Access Act, has taken into consideration the findings of the court decisions, and has considered the marketplace changes that have taken place since passage of the law. I believe the final rule complies with the letter of the law and accomplishes the goal of extending credit union services to more Americans.”

Johnson also discussed her initiative on the member business lending regulation and described how this aligns with President Bush’s plan to strengthen small businesses. Johnson stated that, “Small businesses are the backbone of our nation’s economy. The President’s initiative will benefit small businesses for years to come by reducing taxes, encouraging investment, and removing obstacles to growth. My desire in reviewing and proposing changes to the member business lending regulation, while remaining within the confines of the statute provided, is to ensure that credit unions are able to meet the financing needs of their small business owner members.”

The proposed credit union member business loan rule will, among other things: 1) improve the way NCUA would classify the selling and purchasing of loan participations; 2) allow unsecured member business loans within established limits; 3) change a credit union’s business loan policy requirements to allow credit unions the ability to adopt analysis and documentation requirements that are appropriate for the specific types of loans made, rather than the current one-size fits all approach; and 4) allow credit union service organizations to originate member business loans.

In proposing changes to the rule, Vice Chair Johnson stated, “It is important to point out that while the board is proposing changes to the member business lending regulation, we maintain the high standards of expected business management and safety and soundness.” The rule has been issued for a 60-day comment period and Johnson “urged credit unions to take the time to review the proposal and provide your comments to us. It is important that, as regulators, we hear from the credit unions that are impacted by the regulations we enforce.”

President George W. Bush nominated JoAnn Johnson to a seat on the NCUA Board and the U.S. Senate confirmed her nomination March 22, 2002. Johnson was elected to the Iowa Senate in 1994 where she chaired the Senate Ways and Means Committee and the Senate Commerce Committee. Johnson’s term on the NCUA Board will expire in August 2007.

The National Credit Union Administration, governed by a three-member board appointed by the President and confirmed by the Senate, is the independent federal agency that regulates, charters and supervises federal credit unions. NCUA, with the backing of the full faith and credit of the U.S. government, operates and manages the National Credit Union Share Insurance Fund, insuring the deposits of more than 80 million account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions.