[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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