Dollar Says Community Credit Unions “Part
Of The Solution”
To Extending Financial Services To More Low-Income Americans
NCUA Chairman Calls Upon Community Credit Unions To Document
Their Successes Which He Says Are Key To Access Across America Success
WILLIAMSBURG, VA (October 15, 2003) – National Credit Union
Administration (NCUA) Chairman Dennis Dollar told a group of community
credit union leaders here today that credit unions with community-based
fields of membership, including both community-chartered credit unions
and occupational credit unions that adopt underserved communities,
are “key to the success of NCUA’s Access Across America
initiative” and called upon them to better document and share
their success stories.
Speaking before the National Association of Community Credit Unions
annual conference, Dollar said that community credit unions are being “unfairly
criticized as being interested in growth only for the sake of growth
when, in reality, the risk diversification that a community field of
membership provides is making your credit unions stronger and the extension
of lower cost financial services to more low-income Americans is a
natural outgrowth of your credit union heartbeat to serve neighborhoods
throughout your communities.”
“When it comes to extending lower cost financial services to
more low-income Americans,” said Dollar, “community credit
unions are part of the solution.”
“Community credit unions have been around since the early credit
unions in America,” said Dollar in emphasizing the long history
of community credit unions serving low-income American. “The
first credit union founded in 1907 was a community-based St. Mary’s
credit union in an economically deprived parish of Manchester, New
Hampshire. As it built lives in the parish, it built a strong credit
union still prospering almost a century later. Community credit unions
indeed have a rich history of service to Americans from all walks of
life, and you have the opportunity to make an even greater impact through
your leadership in NCUA’s Access Across America initiative.”
Dollar encouraged community credit unions to partner with other community
based organizations and national initiatives to enhance the impact
on their local communities, including homeownership and small business
lending programs. He also spoke of the need to document their success
stories and compile supporting data.
“There will always be those critics who will want to see a CRA-type
standard applied to community credit unions despite there being no
empirical evidence of the type of red lining that brought CRA to the
banking industry in the 1970’s,” said Dollar. “The
best way to counter those critics is by compiling your own data to
demonstrate just how many hundreds of thousands of low-income Americans
would not have a home, a car, a child in college or their own start-up
business if they had not had a credit union in their community. The
successes are incredible and I see them first hand as I travel the
country visiting these underserved neighborhoods and communities. You
need to make sure that story is being told and continues to be told
in the years to come as these successes build upon each other.”
Dollar said that the number of federal community credit unions was
approximately 14 percent of the total number of federal credit unions,
holding approximately 17 percent of total federal credit union assets.
The percentage of federal charters increases from 14 to 18 percent
when those occupational and associational charters that have adopted
underserved communities are added. The percentage of state-chartered
credit unions with community based charters is approximately 30 percent
and they hold about 59 percent of state-chartered total assets.
Dollar predicted that those percentages will increase in the years
to come because of the need for risk diversification and updated field
of membership rules which make conversion to a community charter a
more viable option for credit unions.
“Although a community charter is not right for every credit
union,” said Dollar, “it is a valuable option for a credit
union needing greater diversification in its field of membership. We
have lost more credit unions when a single occupational sponsor shut
down or got bought out than for any other reason. Many of those otherwise
financially sound credit unions could have been saved if they had more
viable diversification options for their field of membership. Congress
has recognized this and so has NCUA. Today, though SEGs, a TIP, adopting
an underserved area, or converting to a community charter, credit unions
have more legal diversification options than ever before. This is a
tremendous victory for both safety and soundness and serving more members
from all walks of life.”
Dennis Dollar was appointed Chairman of the National Credit Union
Administration (NCUA) by President Bush in 2001. A former two-term
member of the Mississippi
House of Representatives, Chairman Dollar served as President and
CEO of the Gulfport VA Federal Credit Union in Gulfport, Mississippi,
prior
to his confirmation to the NCUA Board in 1997.
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 savings of more than 80 million
account holders in all federal credit unions and the overwhelming majority
of state-chartered credit unions.
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