[House Report 117-351]
[From the U.S. Government Publishing Office]
117th Congress } { Report
HOUSE OF REPRESENTATIVES
2nd Session } { 117-351
======================================================================
EXPANDING FINANCIAL ACCESS FOR UNDERSERVED COMMUNITIES ACT
_______
June 7, 2022.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Ms. Waters, from the Committee on Financial Services, submitted the
following
R E P O R T
[To accompany H.R. 7003]
The Committee on Financial Services, to whom was referred
the bill (H.R. 7003) to amend the Federal Credit Union Act to
permit credit unions to serve certain underserved areas, and
for other purposes, having considered the same, reports
favorably thereon with an amendment and recommends that the
bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 3
Background and Need for Legislation.............................. 3
Section-by-Section Analysis of the Legislation................... 4
Hearings......................................................... 4
Committee Consideration.......................................... 5
Committee Votes.................................................. 5
Committee Oversight Findings..................................... 7
Statement of Performance Goals and Objectives.................... 7
New Budget Authority and C.B.O. Cost Estimate.................... 7
Committee Cost Estimate.......................................... 7
Federal Mandates Statement....................................... 7
Advisory Committee Statement..................................... 7
Applicability to Legislative Branch.............................. 7
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits....................................................... 8
Duplicative Federal Programs..................................... 8
Changes to Existing Law.......................................... 8
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Expanding Financial Access for
Underserved Communities Act''.
SEC. 2. CREDIT UNION SERVICE TO UNDERSERVED AREAS.
Section 109 of the Federal Credit Union Act (12 U.S.C. 1759) is
amended--
(1) in subsection (c)(2)--
(A) by striking ``the field of membership category of
which is described in subsection (b)(2),'';
(B) by amending subparagraph (A) to read as follows:
``(A) the Board determines that the local community,
neighborhood, or rural district is an underserved area;
and''; and
(C) in subparagraph (B), by inserting ``not later
than 2 years after having such underserved area added
to the credit union's charter,'' before ``the credit
union''; and
(2) by adding at the end the following:
``(h) Change of Field of Membership to Include Underserved Areas.--
``(1) In general.--If an existing Federal credit union
applies to the Board to alter or expand the field of membership
of the credit union to serve an underserved area, the credit
union shall submit a business and marketing plan with such
application that explains the credit union's ability and intent
to serve the population of the underserved area through the
change in field of membership.
``(2) Report by credit union.--Not later than 2 years after
the date on which a Federal credit union's application
described under paragraph (1) is approved, the credit union, as
part of the ordinary course of the examination cycle and
supervision process, shall submit a report to the
Administration that includes--
``(A) an estimate of the number of members of the
credit union who are members by reason of the
application;
``(B) a description of the types of financial
services utilized by members of the credit union who
are members by reason of the application; and
``(C) an update of the credit union's implementation
of the business and marketing plan described under
paragraph (1).''.
SEC. 3. MEMBER BUSINESS LENDING IN UNDERSERVED AREAS.
Section 107A(c)(1)(B) of the Federal Credit Union Act (12 U.S.C.
1757a(c)(1)(B)) is amended--
(1) in clause (iv), by striking ``or'' at the end;
(2) in clause (v), by striking the period and inserting ``;
or''; and
(3) by adding at the end the following:
``(vi) that is made to a member or associated
borrower that lives in or operates in an
underserved area.''.
SEC. 4. UNDERSERVED AREA DEFINED.
Section 101 of the Federal Credit Union Act (12 U.S.C. 1752) is
amended--
(1) in paragraph (8), by striking ``; and'' and inserting a
period;
(2) in paragraph (9), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(10) The term `underserved area' means a geographic area
consisting of one or more population census tracts or one or
more counties, that encompass or are located within--
``(A) an investment area, as defined under section
103(16) of the Community Development Banking and
Financial Institutions Act of 1994;
``(B) groups of contiguous census tracts in which at
least 85 percent individually qualify as low-income
communities, as defined under section 45D(e) of the
Internal Revenue Code of 1986; or
``(C) an area that is more than ten miles, as
measured from each point along the area's perimeter,
from the nearest branch of a depository institution (as
defined under section 3 of the Federal Deposit
Insurance Act) or credit union.''.
SEC. 5. REPORTS BY THE NATIONAL CREDIT UNION ADMINISTRATION.
(a) Initial Report.--Not later than 3 years after the date of
enactment of this Act, but no sooner than 2 years after the date of
enactment of this Act, the National Credit Union Administration shall
issue a report to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and Urban
Affairs of the Senate on the implementation of the amendments made by
this Act.
(b) Update.--The National Credit Union Administration shall issue an
updated report on the implementation of the amendments made by this Act
to the committees described under subsection (a) on the date that is 5
years after the date on which the Administration issues the initial
report under subsection (a).
Purpose and Summary
On March 8, 2022, Representative Waters introduced H.R.
7003, the ``Expanding Financial Access for Underserved
Communities Act,'' which would allow all federal credit unions
to apply to the National Credit Union Administration (NCUA) to
expand their field of membership to include underserved
communities, including communities that lack a depository
institution branch within 10 miles. It would also exempt loans
made by credit unions to businesses in underserved areas from
the credit union member business lending cap.
Background and Need for Legislation
``Banking deserts'' are communities without adequate access
to a nearby bank branch, which may make it more difficult for
consumers to obtain access to financial services, including
affordable banking services. A recent study by the Federal
Reserve (Fed) identified 44 counties deeply affected by bank
branch closures, which it defined as counties that had 10 or
fewer branches and lost at least 50% of those branches between
2012 and 2017. The four largest megabanks have significantly
reduced their U.S. branch networks from over 18,900 branches 10
years ago to over 15,300 branches as of June 30, 2020. The
Congressional Research Service analyzed branch location data
for the four largest megabanks and located only one branch
(specifically a Wells Fargo branch located in Madison County,
Florida) in any of the counties identified by the Fed as deeply
affected by branch closures.
Meanwhile, research has shown that the number of bank
branches in rural and underserved areas has decreased by almost
11 percent since 2012, while the number of credit union
branches in those areas has grown by more than 2 percent.
Currently, multiple common bond credit unions are eligible to
expand their field of membership to underserved areas. The ANS
to H.R. 7003 would expand that authority to all federal credit
unions. The Committee has held several hearings on this
legislation. In a May 2021 hearing, Chairwoman Waters asked
NCUA Chairman Harper, ``[S]hould we allow a credit union to
expand its field of membership to set up a branch in areas
where there are no physical branches?'' Chairman Harper
responded, ``That is something that would certainly be helpful.
The NCUA board and its members have long called upon Congress
to allow not just multiple common bond credit unions to add
underserved areas, but also single common bond, and community
charters. That would be a good way potentially to help provide
service to those areas.''
Moreover, the bill would exempt business loans made to
borrowers located in underserved areas from the credit union
member business lending cap. Current statute limits a credit
union's member business loans (MBLs) aggregate amount to the
lesser of 1.75 times the credit union's net worth or 12.25% of
the credit union's total assets with three exceptions. The
exceptions were authorized for credit unions with low-income
designations, which are chartered for the purpose of making
business loans, and with a history of primarily making such
loans. This bill would create an additional exception to help
promote business lending in underserved areas.
Section-by-Section Analysis
Section 1. Short title
This section establishes the short title of the
bill as the ``Expanding Financial Access for Underserved
Communities Act.''
Section 2. Credit union service to underserved areas
This section amends the Federal Credit Union Act
to allow an existing Federal credit union to alter or expand
their field of membership to serve an underserved area, as
defined by Section 4 of the bill. The credit union would be
required to submit a business and marketing plan that explains
the credit union's ability and intent to serve the population
of the underserved area, and if approved, submit a report to
NCUA within 2 years after being approved with an estimate of
the number of members of the credit union who are members by
reason of the expansion; a description of the types of
financial services utilized by members of the credit union who
are members by reason of the expansion; and a progress report
on the credit union's implementation of the business and
marketing plan required in its application.
Section 3. Member business lending in underserved areas
This section would exempt business loans made to a
member or associated borrower that lives in, or operates in, an
underserved area from the credit union's member business
lending cap.
Section 4. Underserved area defined
This section defined a ``underserved area'' to
mean a geographic area consisting of one or more population
census tracts or one or more counties or similar geographic
subdivisions, such as boroughs or parishes, that encompass or
are located within a CDFI investment areas, New Market Tax
Credit areas, and areas with no branch of a depository
institution within 10 miles.
Section 5. Report by the National Credit Union Administration
NCUA would be required to conduct a study on the
implementation of the reforms made by this Act and issue a
report to Congress, between 2 and 3 years after enactment on
its findings. NCUA would be required to conduct a second study
on the implementation of the reforms made by this Act and issue
a report to Congress 5 years after the first report.
Hearings
For the purposes of section 3(c)(6) of House rule XIII, the
Committee on Financial Services' Full Committee held hearings
to consider H.R. 7003 on May 19, 2021, entitled, ``Oversight of
Prudential Regulators: Ensuring the Safety, Soundness,
Diversity, and Accountability of Depository Institutions,'' and
on May 27, 2021, entitled ``Holding Megabanks Accountable: An
update on Banking Practices, Programs, and Policies.''
Additionally, the Committee on Financial Services' Subcommittee
on Consumer Protection & Financial Institutions held a hearing
to consider H.R. 7003 on July 21, 2021, entitled ``Banking the
Unbanked: Exploring Private and Public Efforts to Expand Access
to the Financial System.''
Committee Consideration
The Committee on Financial Services met in open session on
May 18, 2022 and ordered H.R. 7003 to be reported favorably to
the House with an amendment in the nature of a substitute by a
vote of 27 yeas and 22 nays, a quorum being present.
Committee Votes and Roll Call Votes
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
following roll call votes occurred during the Committee's
consideration of H.R. 7003: Ordered reported to the House, as
amended, with a favorable recommendation by a recorded vote of
27 yeas and 22 nays.
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the Committee's oversight findings and recommendations are
reflected in the descriptive portions of this report.
Statement of Performance Goals and Objectives
Pursuant to clause (3)(c) of rule XIII of the Rules of the
House of Representatives, the goals of H.R. 7003 are to
reauthorize and make permanent the National Credit Union
Administration's (NCUA) authority over the third-party vendors
of credit unions. It would also provide the Federal Housing
Finance Agency (FHFA) with similar authority over the third-
party vendors of Fannie Mae, Freddie Mac and the Federal Home
Loan Banks.
New Budget Authority and CBO Cost Estimate
Pursuant to clause 3(c)(2) of rule XIII of the Rules of the
House of Representatives and section 308(a) of the
Congressional Budget Act of 1974, and pursuant to clause
3(c)(3) of rule XIII of the Rules of the House of
Representatives and section 402 of the Congressional Budget Act
of 1974, the Committee has requested an estimate from the
Director of the Congressional Budget Office. CBO was unable to
provide an estimate in a timely manner.
Committee Cost Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 7003. The
Committee has requested an estimate from the Director of the
Congressional Budget Office, but the CBO was unable to provide
an estimate in a timely manner. After careful review the
Committee estimates that H.R. 7003 would have an insignificant
impact on spending.
Unfunded Mandate Statement
Pursuant to Section 423 of the Congressional Budget and
Impoundment Control Act (as amended by Section 101(a)(2) of the
Unfunded Mandates Reform Act, Pub. L. 104-4), the Committee
adopts its own the estimate of federal mandates regarding H.R.
7003, as amended.
Advisory Committee
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Application of Law to the Legislative Branch
Pursuant to section 102(b)(3) of the Congressional
Accountability Act, Pub. L. No. 104-1, H.R. 7003, as amended,
does not apply to terms and conditions of employment or to
access to public services or accommodations within the
legislative branch.
Earmark Statement
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 7003 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as described in clauses 9(e), 9(f), and 9(g) of rule
XXI.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of H.R. 7003 establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
federal program, a program that was included in any report from
the Government Accountability Office to Congress pursuant to
section 21 of Public Law 111-139, or a program related to a
program identified in the most recent Catalog of Federal
Domestic Assistance.
Changes to Existing Law
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, H.R. 7003, as reported, are shown as follows:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
FEDERAL CREDIT UNION ACT
* * * * * * *
TITLE I--FEDERAL CREDIT UNIONS
definitions
Sec. 101. As used in this Act--
(1) the term ``Federal credit union'' means a
cooperative association organized in accordance with
the provisions of this Act for the purpose of promoting
thrift among its members and creating a source of
credit for provident or productive purposes;
(2) the term ``Chairman'' means the Chairman of the
National Credit Union Administration;
(3) the term ``Administration'' means the National
Credit Union Administration;
(4) the term ``Board'' means the National Credit
Union Administration Board;
(5) The terms ``member account'' and ``account'' mean
a share, share certificate, or share draft account of a
member of a credit union of a type approved by the
Board which evidences money or its equivalent received
or held by a credit union in the usual course of
business and for which it has given or is obligated to
give credit to the account of the member, and, in the
case of a credit union serving predominantly low-income
members (as defined by the Board), such terms (when
referring to the account of a nonmember served by such
credit union) mean a share, share certificate, or share
draft account of such nonmember which is of a type
approved by the Board and evidences money or its
equivalent received or held by such credit union in the
usual course of business and for which it has given or
is obligated to give credit to the account of such
nonmember, and such terms mean share, share
certificate, or share draft account of nonmember credit
unions and nonmember units of Federal, State, or local
governments and political subdivisions thereof
enumerated in section 207 of this Act, and such terms
mean custodial accounts established for loans sold in
whole or in part pursuant to section 107(13): Provided,
That for purposes of insured State credit unions,
reference in this paragraph to ``share'', ``share
certificate'', or ``share draft'' accounts includes, as
determined by the Board, the equivalent of such
accounts under State law;
(6) The terms ``State credit union'' and ``State-
chartered credit union'' mean a credit union organized
and operated according to the laws of any State, the
District of Columbia, the several territories and
possessions of the United States, the Panama Canal
Zone, or the Commonwealth of Puerto Rico, which laws
provide for the organization of credit unions similar
in principle and objectives to Federal credit unions;
(7) The term ``insured credit union'' means any
credit union the member accounts of which are insured
in accordance with the provisions of title II of this
Act, and the term ``noninsured credit union'' means any
credit union the member accounts of which are not so
insured;
(8) The term ``Fund'' means the National Credit Union
Share Insurance Fund[; and].
(9) The term ``branch'' includes any branch credit
union, branch office, branch agency, additional office,
or any branch place of business located in any State of
the United States, the District of Columbia, the
several territories, including the trust territories,
and possessions of the United States, the Panama Canal
Zone, or the Commonwealth of Puerto Rico, at which
member accounts are established or money lent. The term
``branch'' also includes a suboffice, operated by a
Federal credit union or by a credit union authorized by
the Department of Defense, located on an American
military installation in a foreign country or in the
trust territories of the United States[.]; and
(10) The term ``underserved area'' means a geographic
area consisting of one or more population census tracts
or one or more counties, that encompass or are located
within--
(A) an investment area, as defined under
section 103(16) of the Community Development
Banking and Financial Institutions Act of 1994;
(B) groups of contiguous census tracts in
which at least 85 percent individually qualify
as low-income communities, as defined under
section 45D(e) of the Internal Revenue Code of
1986; or
(C) an area that is more than ten miles, as
measured from each point along the area's
perimeter, from the nearest branch of a
depository institution (as defined under
section 3 of the Federal Deposit Insurance Act)
or credit union.
* * * * * * *
SEC. 107A. LIMITATION ON MEMBER BUSINESS LOANS.
(a) In General.--On and after the date of enactment of this
section, no insured credit union may make any member business
loan that would result in a total amount of such loans
outstanding at that credit union at any one time equal to more
than the lesser of--
(1) 1.75 times the actual net worth of the credit
union; or
(2) 1.75 times the minimum net worth required under
section 216(c)(1)(A) for a credit union to be well
capitalized.
(b) Exceptions.--Subsection (a) does not apply in the case
of--
(1) an insured credit union chartered for the purpose
of making, or that has a history of primarily making,
member business loans to its members, as determined by
the Board; or
(2) an insured credit union that--
(A) serves predominantly low-income members,
as defined by the Board; or
(B) is a community development financial
institution, as defined in section 103 of the
Community Development Banking and Financial
Institutions Act of 1994.
(c) Definitions.--As used in this section--
(1) the term ``member business loan''--
(A) means any loan, line of credit, or letter
of credit, the proceeds of which will be used
for a commercial, corporate or other business
investment property or venture, or agricultural
purpose; and
(B) does not include an extension of credit--
(i) that is fully secured by a lien
on a 1- to 4-family dwelling;
(ii) that is fully secured by shares
in the credit union making the
extension of credit or deposits in
other financial institutions;
(iii) that is described in
subparagraph (A), if it was made to a
borrower or an associated member that
has a total of all such extensions of
credit in an amount equal to less than
$50,000;
(iv) the repayment of which is fully
insured or fully guaranteed by, or
where there is an advance commitment to
purchase in full by, any agency of the
Federal Government or of a State, or
any political subdivision thereof; [or]
(v) that is granted by a corporate
credit union (as that term is defined
by the Board) to another credit
union[.]; or
(vi) that is made to a member or
associated borrower that lives in or
operates in an underserved area.
(2) the term ``net worth''--
(A) with respect to any insured credit union,
means the credit union's retained earnings
balance, as determined under generally accepted
accounting principles; and
(B) with respect to a credit union that
serves predominantly low-income members, as
defined by the Board, includes secondary
capital accounts that are--
(i) uninsured; and
(ii) subordinate to all other claims
against the credit union, including the
claims of creditors, shareholders, and
the Fund; and
(3) the term ``associated member'' means any member
having a shared ownership, investment, or other
pecuniary interest in a business or commercial endeavor
with the borrower.
(d) Effect on Existing Loans.--An insured credit union that
has, on the date of enactment of this section, a total amount
of outstanding member business loans that exceeds the amount
permitted under subsection (a) shall, not later than 3 years
after that date of enactment, reduce the total amount of
outstanding member business loans to an amount that is not
greater than the amount permitted under subsection (a).
(e) Consultation and Cooperation With State Credit Union
Supervisors.--In implementing this section, the Board shall
consult and seek to work cooperatively with State officials
having jurisdiction over State-chartered insured credit unions.
* * * * * * *
membership
Sec. 109. (a) In General.--Subject to subsection (b), Federal
credit union membership shall consist of the incorporators and
such other persons and incorporated and unincorporated
organizations, to the extent permitted by rules and regulations
prescribed by the Board, as may be elected to membership and as
such shall each, subscribe to at least one share of its stock
and pay the initial installment thereon and a uniform entrance
fee if required by the board of directors. Shares may be issued
in joint tenancy with right of survivorship with any persons
designated by the credit union member, but no joint tenant
shall be permitted to vote, obtain loans, or hold office,
unless he is within the field of membership and is a qualified
member.
(b) Membership Field.--Subject to the other provisions of
this section, the membership of any Federal credit union shall
be limited to the membership described in one of the following
categories:
(1) Single common-bond credit union.--One group that
has a common bond of occupation or association.
(2) Multiple common-bond credit union.--More than one
group--
(A) each of which has (within the group) a
common bond of occupation or association; and
(B) the number of members, each of which (at
the time the group is first included within the
field of membership of a credit union described
in this paragraph) does not exceed any
numerical limitation applicable under
subsection (d).
(3) Community credit union.--Persons or organizations
within a well-defined local community, neighborhood, or
rural district.
(c) Exceptions.--
(1) Grandfathered members and groups.--
(A) In general.--Notwithstanding subsection
(b)--
(i) any person or organization that
is a member of any Federal credit union
as of the date of enactment of the
Credit Union Membership Access Act may
remain a member of the credit union
after that date of enactment; and
(ii) a member of any group whose
members constituted a portion of the
membership of any Federal credit union
as of that date of enactment shall
continue to be eligible to become a
member of that credit union, by virtue
of membership in that group, after that
date of enactment.
(B) Successors.--If the common bond of any
group referred to in subparagraph (A) is
defined by any particular organization or
business entity, subparagraph (A) shall
continue to apply with respect to any successor
to the organization or entity.
(2) Exception for underserved areas.--Notwithstanding
subsection (b), in the case of a Federal credit union,
[the field of membership category of which is described
in subsection (b)(2),] the Board may allow the
membership of the credit union to include any person or
organization within a local community, neighborhood, or
rural district if--
[(A) the Board determines that the local
community, neighborhood, or rural district--
[(i) is an ``investment area'', as
defined in section 103(16) of the
Community Development Banking and
Financial Institutions Act of 1994, and
meets such additional requirements as
the Board may impose; and
[(ii) is underserved, based on data
of the Board and the Federal banking
agencies (as defined in section 3 of
the Federal Deposit Insurance Act), by
other depository institutions (as
defined in section 19(b)(1)(A) of the
Federal Reserve Act); and]
(A) the Board determines that the local
community, neighborhood, or rural district is
an underserved area; and
(B) not later than 2 years after having such
underserved area added to the credit union's
charter, the credit union establishes and
maintains an office or facility in the local
community, neighborhood, or rural district at
which credit union services are available.
(d) Multiple Common-Bond Credit Union Group Requirements.--
(1) Numerical limitation.--Except as provided in
paragraph (2), only a group with fewer than 3,000
members shall be eligible to be included in the field
of membership category of a credit union described in
subsection (b)(2).
(2) Exceptions.--In the case of any Federal credit
union, the field of membership category of which is
described in subsection (b)(2), the numerical
limitation in paragraph (1) of this subsection shall
not apply with respect to--
(A) any group that the Board determines, in
writing and in accordance with the guidelines
and regulations issued under paragraph (3),
could not feasibly or reasonably establish a
new single common-bond credit union, the field
of membership category of which is described in
subsection (b)(1) because--
(i) the group lacks sufficient
volunteer and other resources to
support the efficient and effective
operation of a credit union;
(ii) the group does not meet the
criteria that the Board has determined
to be important for the likelihood of
success in establishing and managing a
new credit union, including demographic
characteristics such as geographical
location of members, diversity of ages
and income levels, and other factors
that may affect the financial viability
and stability of a credit union; or
(iii) the group would be unlikely to
operate a safe and sound credit union;
(B) any group transferred from another credit
union--
(i) in connection with a merger or
consolidation recommended by the Board
or any appropriate State credit union
supervisor based on safety and
soundness concerns with respect to that
other credit union; or
(ii) by the Board in the Board's
capacity as conservator or liquidating
agent with respect to that other credit
union; or
(C) any group transferred in connection with
a voluntary merger, having received conditional
approval by the Administration of the merger
application prior to October 25, 1996, but not
having consummated the merger prior to October
25, 1996, if the merger is consummated not
later than 180 days after the date of enactment
of the Credit Union Membership Access Act.
(3) Regulations and guidelines.--The Board shall
issue guidelines or regulations, after notice and
opportunity for comment, setting forth the criteria
that the Board will apply in determining under this
subsection whether or not an additional group may be
included within the field of membership category of an
existing credit union described in subsection (b)(2).
(e) Additional Membership Eligibility Provisions.--
(1) Membership eligibility limited to immediate
family or household members.--No individual shall be
eligible for membership in a credit union on the basis
of the relationship of the individual to another person
who is eligible for membership in the credit union,
unless the individual is a member of the immediate
family or household (as those terms are defined by the
Board, by regulation) of the other person.
(2) Retention of membership.--Except as provided in
section 118, once a person becomes a member of a credit
union in accordance with this title, that person or
organization may remain a member of that credit union
until the person or organization chooses to withdraw
from the membership of the credit union.
(f) Criteria for Approval of Expansion of Multiple Common-
Bond Credit Unions.--
(1) In general.--The Board shall--
(A) encourage the formation of separately
chartered credit unions instead of approving an
application to include an additional group
within the field of membership of an existing
credit union whenever practicable and
consistent with reasonable standards for the
safe and sound operation of the credit union;
and
(B) if the formation of a separate credit
union by the group is not practicable or
consistent with the standards referred to in
subparagraph (A), require the inclusion of the
group in the field of membership of a credit
union that is within reasonable proximity to
the location of the group whenever practicable
and consistent with reasonable standards for
the safe and sound operation of the credit
union.
(2) Approval criteria.--The Board may not approve any
application by a Federal credit union, the field of
membership category of which is described in subsection
(b)(2) to include any additional group within the field
of membership of the credit union (or an application by
a Federal credit union described in subsection (b)(1)
to include an additional group and become a credit
union described in subsection (b)(2)), unless the Board
determines, in writing, that--
(A) the credit union has not engaged in any
unsafe or unsound practice (as defined in
section 206(b)) that is material during the 1-
year period preceding the date of filing of the
application;
(B) the credit union is adequately
capitalized;
(C) the credit union has the administrative
capability to serve the proposed membership
group and the financial resources to meet the
need for additional staff and assets to serve
the new membership group;
(D) any potential harm that the expansion of
the field of membership of the credit union may
have on any other insured credit union and its
members is clearly outweighed in the public
interest by the probable beneficial effect of
the expansion in meeting the convenience and
needs of the members of the group proposed to
be included in the field of membership; and
(E) the credit union has met such additional
requirements as the Board may prescribe, by
regulation.
(g) Regulations Required for Community Credit Unions.--
(1) Definition of well-defined local community,
neighborhood, or rural district.--The Board shall
prescribe, by regulation, a definition for the term
``well-defined local community, neighborhood, or rural
district'' for purposes of--
(A) making any determination with regard to
the field of membership of a credit union
described in subsection (b)(3); and
(B) establishing the criteria applicable with
respect to any such determination.
(2) Scope of application.--The definition prescribed
by the Board under paragraph (1) shall apply with
respect to any application to form a new credit union,
or to alter or expand the field of membership of an
existing credit union, that is filed with the Board
after the date of enactment of the Credit Union
Membership Access Act.
(h) Change of Field of Membership to Include Underserved
Areas.--
(1) In general.--If an existing Federal credit union
applies to the Board to alter or expand the field of
membership of the credit union to serve an underserved
area, the credit union shall submit a business and
marketing plan with such application that explains the
credit union's ability and intent to serve the
population of the underserved area through the change
in field of membership.
(2) Report by credit union.--Not later than 2 years
after the date on which a Federal credit union's
application described under paragraph (1) is approved,
the credit union, as part of the ordinary course of the
examination cycle and supervision process, shall submit
a report to the Administration that includes--
(A) an estimate of the number of members of
the credit union who are members by reason of
the application;
(B) a description of the types of financial
services utilized by members of the credit
union who are members by reason of the
application; and
(C) an update of the credit union's
implementation of the business and marketing
plan described under paragraph (1).
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