The need to
"follow the members" and their new expectations has taken
credit unions in many innovative directions during the past year.
The most publicized activities have been the changes in regulatory
charter. Over the past three years, over 150 credit unions have
converted from federal to state charters. As a result, NCUA, NAFCU
and CUNA all have major legislative proposals or studies underway
to reform the federal charter.
factor in many of the charter conversions was greater freedom in
choosing which markets to offer credit union membership. HR 1151,
the Credit Union Membership Act, was intended to resolve the issue
of field of membership for federal credit unions. In fact, NCUA's
review process has become more uncertain, time consuming and bureaucratic.
There is one exception. The community charter authority was not
redefined by 1151. More and more federal credit unions have opted
to choose a community field of membership. For example, Network
FCU was granted a charter for all residents of Clark County, Nev.,
with a population of 1.2 million. In September, San Francisco FCU
was granted a charter for the city of San Francisco.
many state-chartered credit unions have had more flexible field
of membership authority than is possible under the federal charter.
In fact the first credit unions formed in the Northeastern states
were primarily community-based organizations. So it is consistent
with credit union tradition that Hawaiian Telco FCU, originally
serving the telephone employees in Oahu, was granted approval by
NCUA to serve the 875,000 residents of Hawaii's most populous island.
The views of
what should constitute a credit union's market is one of the major
changes in attitude that is occurring. Increasingly, critics and
the regulatory community are realizing that credit unions were formed
to serve members-not to be a part of an employee benefit package.