Chartering and Field of Membership for Federal Credit Unions, 68722-68731 [E9-30557]

Agencies

• National Credit Union Administration

[Federal Register Volume 74, Number 248 (Tuesday, December 29, 2009)]
[Proposed Rules]
[Pages 68722-68731]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-30557]


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NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 701

RIN 3133-AD65


Chartering and Field of Membership for Federal Credit Unions

AGENCY: National Credit Union Administration (NCUA).

ACTION: Proposed rule.

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SUMMARY: The NCUA Board proposes to amend its chartering and field of 
membership manual to update its community chartering policies. These 
amendments include using objective and quantifiable criteria to 
determine the existence of a local community and defining the term 
``rural district.'' The amendments clarify NCUA's marketing plan 
requirements for credit unions converting to or expanding their 
community charters and define the term ``in danger of insolvency'' for 
emergency merger purposes.

DATES: Comments must be postmarked or received by March 1, 2010.

ADDRESSES: You may submit comments by any of the following methods 
(Please send comments by one method only):
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     NCUA Web site: https://www.ncua.gov/RegulationsOpinionsLaws/proposedregs/proposedregs.html. Follow the 
instructions for submitting comments.
     E-mail: Address to regcomments@ncua.gov. Include ``[Your 
name] Comments on Proposed Rule IRPS 09-1,'' in the e-mail subject 
line.
     Fax: (703) 518-6319. Use the subject line described above 
for e-mail.
     Mail: Address to Mary F. Rupp, Secretary of the Board, 
National Credit Union Administration, 1775 Duke Street, Alexandria, 
Virginia 22314-3428.
     Hand Delivery/Courier: Same as mail address.

FOR FURTHER INFORMATION CONTACT: Michael J. McKenna, Deputy General 
Counsel; John K. Ianno, Associate General Counsel; Frank Kressman, 
Staff Attorney, Office of General Counsel, or Robert Leonard, Program 
Officer, Office of Examination and Insurance, 1775 Duke Street, 
Alexandria, Virginia 22314 or telephone (703) 518-6540 or (703) 518-
6396.

SUPPLEMENTARY INFORMATION:

A. Background and Overview

    In 1998, Congress passed the Credit Union Membership Access Act 
(``CUMAA'') and reiterated its longstanding support for credit unions, 
noting that they ``have the specif[ic] mission of meeting the credit 
and savings needs of consumers, especially persons of modest means.'' 
Public Law 105-219, Sec.  2, 112 Stat. 913 (August 7, 1998). The 
Federal Credit Union Act (``FCUA'') grants the NCUA Board broad general 
rulemaking authority over Federal credit unions. 12 U.S.C. 1766(a). In 
passing CUMAA, Congress amended the FCUA and specifically delegated to 
the Board the authority to define by regulation the meaning of a 
``well-defined local community'' (WDLC) and rural district for Federal 
credit union charters. 12 U.S.C. 1759(g).
    The Board continues to recognize two important characteristics of a 
WDLC. First, there is geographic certainty to the community's 
boundaries, which must be well-defined. Second, there is sufficient 
social and economic activity among enough community members to assure 
that a viable community exists. Since CUMAA, NCUA has expressed this 
latter requirement as ``interaction and/or shared common interests.'' 
NCUA Chartering and Field of Membership Manual (Chartering Manual), 
Interpretive Ruling and Policy Statement (IRPS) 08-2, Chapter 2, V.A.1.
    The Board has gained broad experience in determining what 
constitutes a WDLC by analyzing numerous applications for community 
charter conversions and expansions. In this process, the Board has 
exercised its regulatory judgment in determining whether, in a 
particular case, a WDLC exists. This involves applying its expertise to 
the question of whether a proposed area has a sufficient level of 
interaction and/or shared common interests to be considered a WDLC. The 
Board is aware that there is considerable uncertainty among community 
charter applicants regarding two important issues, particularly in 
connection with applications involving large multi-jurisdictional 
areas. The first is how an applicant can best demonstrate the requisite 
interaction and/or shared common interests of a WDLC. The second is how 
much evidence is required in a particular case. The primary purpose of 
this proposal is to eliminate that uncertainty and conserve the 
economic and human resources of applicants and NCUA. To this end, the 
Board proposes to define WDLC in terms of objective and quantifiable 
criteria that, in the Board's opinion, conclusively demonstrate 
interaction and/or common interests.
    Using objective and easy to apply criteria will replace the 
current, burdensome practice of requiring an applicant to demonstrate 
the existence of a WDLC using a narrative approach with supporting 
documents. This approach will enable applicants to easily, quickly, and 
inexpensively determine, with certainty, if the geographic area they 
wish to serve is a WDLC.
    Under the current proposal, as discussed more fully below, a 
geographic area would automatically qualify as a WDLC in the following 
three ways:
    1. As a single political jurisdiction less than an entire State, or 
a defined portion of that single political jurisdiction;
    2. As a statistical area limited to 2.5 million or less people, so 
designated by the Office of Management and Budget (OMB), if it has a 
single core area and the core satisfies a concentration threshold for 
employment and population or as a portion of that statistical area 
provided the smaller area independently meets the same employment and 
population requirements; and
    3. As an existing, previously approved area ``grandfathered'' for 
use by future applicants.
    Additionally, the NCUA Board proposes to define the term ``rural 
district'' for chartering purposes. The Board believes this will help 
extend credit union services to individuals living in rural America 
without adequate access to reasonably priced financial services. 
Finally, the Board proposes to provide community charter applicants 
with more detailed guidance on NCUA's expectations regarding the 
adequacy of an applicant's business and marketing plans required as 
part of the charter application.

[[Page 68723]]

B. Current Community Charter Rules

    In the single political jurisdiction context, it is easy to 
demonstrate that an area is a WDLC, a single, geographically well-
defined local community or neighborhood where individuals have common 
interests and/or interact. A single political jurisdiction such as a 
city, county, or their political equivalent or any contiguous portion 
thereof automatically qualifies as a WDLC.
    It is much more complicated, however, for an applicant to 
demonstrate that an area comprised of multiple, contiguous political 
jurisdictions is a WDLC. In that instance, the current rules require a 
credit union to submit a narrative describing how the area meets the 
standards for community interaction and/or common interests with 
supporting documentation. Supporting documentation often includes 
information regarding commuting patterns, employment patterns, major 
trade areas, shared common facilities, organizations and clubs within 
the requested area, newspaper penetration, festivals, and entertainment 
centers. Compiling this potentially voluminous amount of information 
can be difficult, time consuming, and expensive for the applicant and 
is a wasted effort in those instances where the narrative and 
supporting documents do not sufficiently make the case for the 
existence of a WDLC.
    Because the nature of the supporting documentation can be 
subjective, it is time consuming and labor intensive for NCUA to review 
a narrative application. As part of the process, NCUA often requests 
the applicant clarify some of the information provided or supply 
additional information to help NCUA properly analyze the application in 
accordance with the requirements of the Chartering Manual. While 
requesting more or clarified information is often necessary for NCUA to 
make a decision, it increases the credit union's time and expense of 
preparing a community charter application.
    Another problem related to NCUA determining that a multiple, 
contiguous political jurisdiction is a WDLC based on a narrative 
application is the risk of litigation. Because the narrative approach 
is inherently a subjective one, it is vulnerable to legal challenges. 
NCUA believes it would benefit all involved to eliminate the great 
expense, effort, and uncertainty associated with the narrative approach 
in favor of a simpler, more objective method.
    Finally, NCUA believes the absence of a regulatory definition of 
``rural district'' in NCUA's current chartering rules is an impediment 
to expanding credit union services to individuals in rural areas.

C. May 2007 Proposal

    The NCUA Board issued proposed revisions to the Chartering Manual 
in May 2007 to clarify and amend NCUA's community chartering policies 
and solicited public comment on the proposed amendments. 72 FR 30988 
(June 5, 2007). In that rulemaking, NCUA sought to clarify the meaning 
of WDLC. Specifically, the proposal identified single political 
jurisdictions and statistical areas as presumptive WDLCs and required a 
credit union seeking a local community consisting of multiple political 
jurisdictions, if not a presumed WDLC, to provide a narrative with 
documentation to support that the requested geographical area meets the 
standards for community interaction and/or common interests. While the 
May 2007 proposal embraced using more objective standards to determine 
whether a particular area is a WDLC, it continued to allow community 
charter applicants to submit narrative applications with supporting 
documentation in the multiple, political jurisdictions context where 
there was no presumed WDLC. For the reasons discussed above, that 
aspect of the proposal is undesirable and would perpetuate the 
inefficiencies of the current process.
    The 2007 proposal also provided that when the narrative approach 
was required to support the existence of a WDLC, a public notice and 
comment period would be used to inform the public about the application 
and assist NCUA in determining if the area was a WDLC. At the time, the 
Board thought a 30-day public notice and comment period might assist it 
in its critical analysis of the evidence and provide the public with an 
opportunity to provide timely comments and relevant information on the 
proposed local community. The notice and comment provision has become 
moot because the NCUA Board is proposing to eliminate the continued use 
of the narrative application.
    NCUA had not attempted to define the term ``rural district'' prior 
to the 2007 proposal, although there is statutory language authorizing 
credit unions to be chartered to serve a rural district. Rural 
districts tend to lack the traditional characteristics of interaction 
or shared common interests found in WDLCs. In 2007, the Board proposed 
a definition of rural district stating it expected a rural district 
would be less densely populated than WDLCs NCUA had considered in the 
past and noted that rural districts frequently lack any centralized 
urban core or cluster. The Board also stated that although a proposed 
rural district may include contiguous counties it believed such a 
district should have a relatively small, widely disbursed, population. 
The Board proposed to define a rural district as an area that is not in 
a metropolitan statistical area (MSA) or micropolitan statistical area 
(MicroSA), as those terms are defined below, has a population density 
that does not exceed 100 people per square mile, and where the total 
population does not exceed 100,000. That definition would have excluded 
the majority of the United States population that lives in and around 
large urban areas yet, based on census data, still include the vast 
majority of counties in the United States having fewer than 100,000 
persons. Population density varies widely but many counties also have a 
density of less than 100 persons per square mile. Those requirements 
would have assured that an area under consideration as a rural district 
would have a small total population and a relatively light population 
density.
    When developing that proposed definition, the Board considered the 
criteria other executive branch agencies use as a framework for 
defining what is rural in the United States. These agencies are the 
U.S. Census Bureau (Census), OMB, and the Economic Research Service 
(ERS) of the U.S. Department of Agriculture (USDA). The following table 
summarizes each agency's definition of what constitutes a rural area.

------------------------------------------------------------------------
                                        Definition of rural area
------------------------------------------------------------------------
Census........................  The Census Bureau defines rural area by
                                 exclusion by considering areas outside
                                 urbanized areas or urban clusters
                                 rural.
                                 The Census defines an urbanized
                                 area as an area consisting of adjacent,
                                 densely settled, census block groups
                                 and census blocks that meet minimum
                                 population density requirements. The
                                 urbanized area definition also includes
                                 adjacent densely settled census blocks
                                 that collectively have a population of
                                 at least 50,000 people.

[[Page 68724]]

 
                                 The Census defines urban
                                 clusters as contiguous, densely
                                 settled, census block groups and census
                                 blocks that meet minimum population
                                 density requirements. This definition
                                 also includes adjacent densely settled
                                 census blocks that collectively have
                                 populations ranging from 2,500 to less
                                 than 50,000 people.
                                 The Census Bureau relies upon
                                 the standards implemented by the OMB,
                                 as discussed below, for classifying
                                 areas as metropolitan areas.
                                The Census Bureau considers all other
                                 areas rural. [Reference: https://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=2002_register&docid=02-6186-filed.pdf.]
OMB...........................  The OMB defines MSAs, or metropolitan
                                 areas, as central (core) counties with
                                 one or more urbanized areas, and
                                 outlying counties that are economically
                                 tied to the core counties as measured
                                 by work commuting. OMB uses the MicroSA
                                 classification to identify a non-metro
                                 county with an urban cluster of at
                                 least 10,000 persons or more. Non-core
                                 counties are neither micro nor metro.
                                Agencies outside of OMB often designate
                                 non-metro counties as rural.
                                 [Reference: https://www.whitehouse.gov/omb/bulletins/fy2007/b07-01.pdf.]
ERS...........................  ERS of the USDA considers areas rural if
                                 the OMB has not designated any part of
                                 the area as an MSA or core county.
                                ERS also consider some areas designated
                                 by OMB as MSAs rural based on their
                                 assessments of Census data and other
                                 agency research. ERS has developed
                                 several classifications to measure
                                 rurality within individual MSAs.
                                ERS researchers who discuss conditions
                                 in rural America refer to non-MSA areas
                                 that include both micropolitan and non-
                                 core counties as rural areas. When the
                                 OMB classifies an area as a MicroSA,
                                 the ERS still considers these areas
                                 rural according to their definition.
                                 Rurality is a term used by the USDA ERS
                                 to explain the rural nature of an area.
                                [Reference: https://www.ers.usda.gov/Briefing/Rurality/WhatIsRural/ Briefing/Rurality/WhatIsRural/.]
------------------------------------------------------------------------

    The Census Bureau, the OMB, and the ERS all provide definitions of 
rurality based on their analysis of 2000 census data. See 72 FR 30988, 
30992 (June 5, 2007).
    After a review of the comments, and upon further consideration, the 
Board believes the definition of rural district proposed in 2007 does 
not adequately reflect the unique nature of rural areas. Accordingly, 
the Board proposes a revised definition of rural district in the 
current proposal, as discussed below, that it believes is easier to 
apply and better reflects NCUA's goal to use a simpler, more objective 
approach to reviewing community charter applications.

D. Current Proposal

    Upon further reflection, including having considered the public 
comments to the May 2007 proposed rule, the NCUA Board has decided to 
issue this proposal as a substitute for the May 2007 proposal. As 
noted, some provisions of the May 2007 proposal have been brought 
forward into the current proposal without change, while others have 
been modified or eliminated. NCUA believes the current proposal is a 
better method for improving the community charter policies of NCUA's 
Chartering Manual.

1. Well Defined Local Communities

    NCUA believes it continues to be prudent policy to consider single 
political jurisdictions and statistical areas, as those terms are 
described more fully below, as WDLCs because they meet reasonable 
objective and quantifiable standards. For reasons discussed more fully 
below, single political jurisdictions are treated the same in the 
current proposal as in the May 2007 proposal. Statistical areas, 
however, are treated somewhat differently in the current proposal from 
how they were treated in the May 2007 proposal. In the current 
proposal, NCUA has added an additional criterion an applicant must meet 
to establish that a statistical area with multiple jurisdictions is a 
WDLC. Specifically, the additional criterion limits a multiple 
jurisdiction WDLC's population to 2.5 million or less people, as 
discussed further below.
a. WDLCs
i. Single Political Jurisdictions
    The FCUA provides that a ``community credit union'' consists of 
``persons or organizations within a well-defined local community, 
neighborhood, or rural district.'' 12 U.S.C. 1759(b)(3). The FCUA 
expressly requires the Board to apply its regulatory expertise and 
define what constitutes a WDLC. 12 U.S.C. 1759(g). It has done so in 
the Chartering Manual, Chapter 2, Section V, Community Charter 
Requirements. In 2003, the Board, after issuing notice and seeking 
comments, issued IRPS 03-1 that stated any county, city, or smaller 
political jurisdiction, regardless of population size, is by definition 
a WDLC. 68 FR 18334, 18337 (Apr. 15, 2003). An entire State is not 
acceptable as a WDLC. Under this definition, no documentation 
demonstrating that the political jurisdiction is a WDLC is required.
    After more than six years of experience, the Board has reviewed 
this definition of WDLC and still finds it compelling. The Board finds 
that a single governmental unit below the State level is well-defined 
and local, consistent with the governmental system in the United States 
consisting of a local, State, and Federal government structure. A 
single political jurisdiction also has strong indicia of a community, 
including common interests and interaction among residents. Local 
governments by their nature generally must provide residents with 
common services and facilities, such as educational, police, fire, 
emergency, water, waste, and medical services. Further, a single 
political jurisdiction frequently has other indicia of a WDLC such as a 
major trade area, employment patterns, local organizations and/or a 
local newspaper. Such examples of commonalities are indicia that single 
political jurisdictions are WDLCs where residents have common interests 
and/or interact.
ii. Statistical Areas
    The Board proposes to establish a statistical definition of WDLC in 
cases involving multiple political jurisdictions. In that context, a 
geographically certain area will be considered a WDLC when the 
following four requirements are met: (1) The area is a recognized core 
based statistical area (CBSA), or in the case of a CBSA with 
Metropolitan Divisions, the area is a single Metropolitan Division; (2) 
the area contains a dominant city, county or equivalent with a majority 
of all jobs in the CBSA or in the metropolitan division; (3) the 
dominant city, county or equivalent contains at least \1/3\ of the 
CBSA's or metropolitan division's total population; and (4) the area 
has a population of 2.5 million or less people.
    The Board's experience has been that WDLCs can come in various 
population and geographic sizes. While the statutory language `local 
community' does imply some limit, Congress has directed NCUA to 
establish a regulatory

[[Page 68725]]

definition consistent with the mission of credit unions. While single 
political jurisdictions below the State level meet the definition of a 
WDLC, nothing precludes a larger area comprised of multiple political 
jurisdictions from also meeting the regulatory definition. There is no 
statutory requirement or economic rationale that compels the Board to 
charter only the smallest WDLC in a particular area.
    The Board's experience has been that applicants have the most 
difficulty in preparing applications involving larger areas with 
multiple political jurisdictions. This is because, as the population 
and the geographic area increase and multiple jurisdictions are 
involved, it can be more difficult to demonstrate interaction and/or 
shared common interests. This often causes some confusion to the 
applicant about what evidence is required and what criteria are 
considered to be most significant under such circumstances.
    The current chartering manual provides examples of the types of 
information an applicant can provide that would normally evidence 
interaction and/or shared common interests. These include but are not 
limited to: (1) Defined political jurisdictions; (2) major trade areas; 
(3) shared common facilities; (4) organizations within the community 
area; and (5) newspapers or other periodicals about the area.
    These examples are helpful but the Board's experience is that very 
often in situations involving multiple jurisdictions, where it has 
determined that a WDLC exists, interaction or common interests are 
evidenced by a major trade area that is an economic hub, usually a 
dominant city, county or equivalent, containing a significant portion 
of the area's employment and population. This central core often acts 
as a nucleus drawing a sufficiently large critical mass of area 
residents into the core area for employment and other social activities 
such as entertainment, shopping, and educational pursuits. By providing 
jobs to residents from outside the dominant core area, it also provides 
income that then generates further interaction both in the hub and in 
outlying areas as those individuals spend their earnings for a wide 
variety of purposes in outlying counties where they live. This 
commonality through interaction and/or shared common interests in 
connection with an economic hub is conducive to a credit union's 
success and supports a finding that such an area is a local community.
    The Board views evidence that an area is anchored by a dominant 
trade area or economic hub as a strong indication that there is 
sufficient interaction and/or common interests to support a finding of 
a WDLC capable of sustaining a credit union. This type of geographic 
model greatly increases the likelihood that the residents of the 
community manifest a ``commonality of routine interaction, shared and 
related work experiences, interests, or activities * * *'' that are 
essential to support a strong healthy credit union capable of providing 
financial services to members throughout the area. Public Law 105-219, 
Sec.  2(3), 112 Stat. 913 (August 7, 1998).
    OMB publishes the geographic areas its analysis indicates exhibit 
these important criteria. The Board is familiar with and has utilized 
these statistics. In the past six years, the agency has approved in 
excess of 50 community charters involving MSAs, usually involving a 
community based around a dominant core trade area.
    The Board believes that when statistics can demonstrate the 
existence of such relevant characteristics it is appropriate to presume 
that sufficient interaction and/or common interests exist to support a 
viable community based credit union. In such situations, the area will 
be considered to have met the regulatory definition of a WDLC.
    Certain areas, however, do not have one dominant economic hub, but 
rather may contain two or more dominant hubs. These situations diminish 
the persuasiveness of the evidence and make it inappropriate to 
automatically conclude that they qualify as WDLCs.
    On December 27, 2000, OMB published Standards for Defining MSAs and 
MicroSAs. 65 FR 82228. The following definitions established by OMB are 
relevant here:
    CBSA--``A statistical geographic entity consisting of the county or 
counties associated with at least one core (urbanized area or urban 
cluster) of at least 10,000 population, plus adjacent counties having a 
high degree of social and economic integration with the core as 
measured through commuting ties with the counties containing the core. 
Metropolitan and Micropolitan Statistical Areas are the two categories 
of Core Based Statistical Areas.'' 65 FR 82238 (Dec. 27, 2000).
    Metropolitan Division--``A county or group of counties within a 
Core Based Statistical Area that contains a core with a population of 
at least 2.5 million.'' 65 FR 82238 (Dec. 27, 2000). OMB recognizes 
that Metropolitan Divisions often function as distinct, social, 
economic, and cultural areas within a larger Metropolitan Statistical 
Area. See OMB Bulletin NO. 07-01, December 18, 2006.
    Metropolitan Statistical Area--``A Core Based Statistical Area 
associated with at least one urbanized area that has a population of at 
least 50,000. The Metropolitan Statistical Area comprises the central 
county or counties containing the core, plus adjacent outlying counties 
having a high degree of social and economic integration with the 
central county as measured through commuting.'' 65 FR 82238 (Dec. 27, 
2000).
    Micropolitan Statistical Area--``A Core Based Statistical Area 
associated with at least one urban cluster that has a population of at 
least 10,000, but less than 50,000. The Micropolitan Statistical Area 
comprises the central county or counties containing the core, plus 
adjacent outlying counties having a high degree of social and economic 
integration with the central county as measured through commuting.'' 65 
FR 82238 (Dec. 27, 2000).
    Demonstrated commuting patterns supporting a high degree of social 
and economic integration are a very significant factor in community 
chartering, particularly in situations involving large areas with 
multiple political jurisdictions. In a community based model, 
significant interaction through commuting patterns into one central 
area or urban core strengthens the membership of a credit union and 
allows a community based credit union to efficiently serve the needs of 
the membership throughout the area. Such data demonstrates a high 
degree of interaction through the major life activity of working and 
activities associated with employment. Large numbers of residents share 
common interests in the various economic and social activities 
contained within the core economic area.
    Historically, commuting has been an uncomplicated method of 
demonstrating functional integration. NCUA agrees with OMB's conclusion 
that ``Commuting to work is an easily understood measure that reflects 
the social and economic integration of geographic areas.'' 65 FR 82233 
(Dec. 27, 2000). The Board also finds compelling OMB's conclusion that 
commuting patterns within statistical areas demonstrate a high degree 
of social and economic integration with the central county. OMB's 
threshold for qualifying a county as an outlying county eligible for 
inclusion in either a MSA or MicroSA is a threshold of 25% inter-county 
commuting. OMB also considers a multiplier effect (a standard method 
used in economic analysis to determine the impact of new jobs on a 
local economy) that each commuter would have on the economy of the

[[Page 68726]]

county in which he or she lives and notes that a multiple of two or 
three generally is accepted by economic development analysts for most 
areas. 65 FR 82233 (Dec. 27, 2000).
    ``Applying such a measure in the case of a county with the minimum 
25 percent commuting requirement means that the incomes of at least 
half of the workers residing in the outlying county are connected 
either directly (through commuting to jobs located in the central 
county) or indirectly (by providing services to local residents whose 
jobs are in the central county) to the economy of the central county or 
counties of the CBSA within which the county at issue qualifies for 
inclusion.'' 65 FR 82233 (Dec. 27, 2000).
    The Board continues to favor the establishment of a standard 
statistical definition of a WDLC. The Board believes that the 
application of strictly statistical rules for determining whether a 
CBSA is a WDLC has the advantage of minimizing ambiguity and making the 
application process less time consuming. In addition to finding 
evidence established in this manner compelling, the Board also believes 
that the reasonableness of the conclusion is further strengthened when 
additional factors establishing the dominance of the core area are 
present. These additional factors are also objective and easily 
measurable.
    As OMB has noted, Metropolitan Divisions often function as distinct 
social, economic, and cultural areas. In the Board's view, this 
evidence detracts from the cohesiveness of a CBSA with Metropolitan 
Divisions. Accordingly, under the proposal, a CBSA with Metropolitan 
Divisions will not meet the definition of a WDLC. Individual 
Metropolitan Divisions within the CBSA will qualify as a WDLC if the 
population and employment criteria are met. Similarly, the Board 
believes that when multiple political jurisdictions are present, an 
overly large population can detract from the cohesiveness of a 
geographic area. For that reason, the Board believes that capping a 
multijurisdictional area at 2.5 million or less people in order to 
qualify as a WDLC is appropriate. The Board chose that population 
threshold because OMB generally designates a metropolitan division 
within a CBSA that has a core of at least 2.5 million people. The Board 
takes that established threshold as a logical breaking point in terms 
of community cohesiveness with respect to a multijurisdictional area.
    Also, the Board acknowledges that not all areas of the country are 
the same and there may be a CBSA that does not contain a sufficiently 
dominant core area or contains several significant core areas. Such 
situations also dilute the cohesiveness of a CBSA. For these reasons, 
the Board proposes to require that a CBSA contain a dominant core city, 
county, or equivalent that contains the majority of all jobs and \1/3\ 
of the total population contained in the CBSA in order to meet the 
definition of a WDLC. These additional requirements will assure that 
the core area dominates any other area within the CBSA with respect to 
jobs and population. Applicants can find information about an area's 
population and number of local jobs, based upon an analysis of where 
people who work in an area reside, at the Census' Internet site (https://www.census.gov). Information about the current definitions of CBSAs is 
available at OMB's Internet site (https://www.whitehouse.gov/omb). 
Community charter applications for part of a CBSA are acceptable 
provided they include the dominant core city, county, or equivalent.
    Accordingly, the Board proposes to establish a statistical 
definition of WDLC in cases involving multiple political jurisdictions. 
Specifically, a geographically well defined area will be considered a 
WDLC in that context when the following four requirements are met:
     The area must be a recognized CBSA, or in the case of a 
CBSA with Metropolitan Divisions the area must be a single Metropolitan 
Division; and
     The area must contain a dominant city, county or 
equivalent with a majority of all jobs in the CBSA or metropolitan 
division; and
     The dominant city, county or equivalent must contain at 
least \1/3\ of the CBSA's or metropolitan division's total population; 
and
     The area must have a population of 2.5 million or less 
people.
    NCUA believes the presence of these criteria clearly demonstrate 
that individuals in those communities have sufficient interaction and/
or common interests. As previously mentioned, NCUA believes this more 
objective approach will benefit all involved by making the application 
and review process faster, simpler, and less labor intensive, and will 
provide a more certain outcome. Also, using objective criteria as the 
basis for granting a community charter will help ensure that NCUA makes 
consistent and uniform decisions from regional office to regional 
office.
    Finally, an applicant that does not wish to serve an entire single 
political jurisdiction or statistical area that is defined as a WDLC 
may apply for a portion of that area. With respect to single political 
jurisdictions, the existing community definition will still apply. With 
respect to statistical areas, for reasons discussed throughout, the 
definition does not automatically apply. Rather, the applicant must 
demonstrate that the portion of the statistical area it wishes to serve 
independently satisfies the criteria for establishing a statistical 
area is a WDLC that meets the required population and employment 
criteria as discussed throughout.

2. Narrative Approach

    As mentioned previously, NCUA does not believe it is beneficial to 
continue the practice of permitting a community charter applicant to 
provide a narrative statement with documentation to support the credit 
union's assertion that an area containing multiple political 
jurisdictions meets the standards for community interaction and/or 
common interests to qualify as a WDLC. As noted, the narrative approach 
is cumbersome, difficult for credit unions to fully understand, and 
time consuming. Accordingly, the NCUA proposes to eliminate from the 
community chartering process the narrative approach and all related 
aspects of that procedure.
    While not every area will qualify as a WDLC, NCUA believes the 
consistency of this objective approach will enhance its chartering 
policy and greatly ease the burden for any community charter applicant.
    To put this in perspective, NCUA analyzed the sixty-one largest 
statistical areas in the United States, based on 2007 population 
estimates, to determine how many would qualify as WDLCs under the 
proposed policy changes. Eleven of those statistical areas contain 
metropolitan divisions. Of the sixty-one statistical areas, twenty-
seven would qualify in their entirety. Of the remaining thirty-four 
statistical areas that would not qualify as WDLCs as a whole, NCUA 
found virtually all of the areas encompass smaller segments that would 
include a majority of the statistical area's residents by virtue of: 
(1) Having a large single political jurisdiction within the statistical 
area; (2) having been previously approved as a WDLC by the NCUA Board; 
or (3) containing a metropolitan division that would qualify as a WDLC 
on its own.

3. Grandfathered WDLCs

    An area previously approved by NCUA as a WDLC, prior to the 
effective date of any amendment to the Chartering Manual, in the event 
the subject proposed amendments are finalized, will continue to be 
considered a WDLC for subsequent applicants who

[[Page 68727]]

wish to serve that exact geographic area. After that effective date, an 
applicant applying for a geographic area that is not exactly the same 
as the previously approved WDLC must comply with the Chartering 
Manual's WDLC criteria then in place.

4. Rural District

    NCUA is proposing a different definition of ``rural district'' from 
that in the May 2007 proposal. For the same reasons discussed with 
respect to WDLCs, the NCUA Board believes the definition of a rural 
district should be based on quantifiable and objective criteria. The 
Board continues to believe that a rural district should be less densely 
populated and smaller in population than those areas that qualify as a 
WDLC.
    The NCUA Board proposes to define a rural district as a contiguous 
area that has more than 50% of its population in census blocks that are 
designated as rural and the total population of the area does not 
exceed 100,000 persons. These requirements will ensure that a rural 
district has both a small total population and a majority of its 
population in areas classified as rural by Census. The Board believes 
this definition will help credit unions serve future members in areas 
that currently have few financial services options. In addition, the 
Board believes there will be minimal overlap between the definitions of 
``rural district'' and ``statistical area'' but recognizes that the 
definitions of ``rural district'' and ``single political jurisdiction'' 
could overlap in some cases.

5. Underserved Communities

    The FCUA defines an underserved area as a local community, 
neighborhood, or rural district that is an ``investment area'' as 
defined in Section 103(16) of the Community Development Banking and 
Financial Institutions Act of 1994. The Board proposes to amend the 
language in the Chartering Manual's underserved communities section 
concerning the ``local community, neighborhood, or rural district'' 
requirement to conform it with the proposed new definitions of WDLC and 
rural district by referring the reader to Chapter 2 for the actual text 
of the definitions. This change will avoid confusion and eliminate any 
need for future changes to the underserved communities section in the 
event additional changes are made to the definitions in Chapter 2.
    In December 2008, NCUA adopted a final rule modifying its 
Chartering Manual to update and clarify four aspects of the process and 
criteria for approving credit union service to underserved areas. 73 FR 
73392 (Dec. 2, 2008). First, the rule clarified that an underserved 
area must independently qualify as a WDLC. Second, it made explicit 
that the Community Development Financial Institution Fund's 
``geographic units'' of measure and 85 percent population threshold, 
when applicable, must be used to determine whether a proposed area 
meets the ``criteria of economic distress'' incorporated by reference 
in the FCUA. Third, it updated the documentation requirements for 
demonstrating that a proposed area has ``significant unmet needs'' 
among a range of specified financial products and services. Finally, 
the rule adopted a ``concentration of facilities'' methodology to 
implement the statutory requirement that a proposed area must be 
``underserved by other depository institutions.'' 73 FR 73392, 73396 
(Dec. 2, 2008).
    Using data supplied by NCUA, the ``concentration of facilities'' 
methodology compares the ratio of depository institution facilities to 
the population within a proposed area's ``non-distressed'' portions 
against the same facilities-to-population ratio in the proposed area as 
a whole. When that ratio in the area as a whole shows more persons per 
facility than does the same ratio in the ``non-distressed'' portions, 
the rule deems the area to be ``underserved by other depository 
institutions.'' Since the final rule was adopted, a perception has 
arisen that this methodology is an obstacle to establishing that an 
area which clearly meets the ``economic distress criteria'' also is 
``underserved by other depository institutions'' as required for the 
area to qualify as underserved. For example, there could be a 
distressed area that contains more financial institutions than a non-
distressed area, but the products and services offered by the financial 
institutions in the distressed area are geared to businesses and high-
income individuals. In this instance, the distressed area would not 
qualify as underserved despite truly lacking affordable financial 
services for low to moderate income individuals. Accordingly, the NCUA 
Board invites public comment on alternative methodologies, based on 
publicly accessible data about both credit unions and other depository 
institutions, for implementing the Act's ``underserved by other 
depository institutions'' criterion.

6. Ability To Serve and Marketing Plans

    Establishing that an area is a WDLC is only the first of two 
criteria an FCU must satisfy to obtain a community charter or community 
charter expansion. The second criterion, after establishing the 
existence of a WDLC, is for an FCU to demonstrate it is able to serve 
the WDLC. This applies to all WDLCs including single political 
jurisdictions, statistical areas, and grandfathered communities. 
Typically, an FCU can demonstrate its ability to serve an established 
WDLC in its marketing plan.
    Under the current Chartering Manual, a credit union converting to 
or expanding its community charter must provide ``a marketing plan that 
addresses how the community will be served.'' The Board proposes 
clarifying NCUA's marketing plan requirement to provide credit unions 
with additional guidance on NCUA's expectations. FCUs need to be 
realistic in assessing their ability to serve a particular community. 
For example, an FCU with $150 million in assets cannot reasonably 
expect to be able to serve a community of 1.5 million people. NCUA 
believes that a meaningful marketing plan must demonstrate, in detail:
     How the credit union will implement its business plan to 
serve the entire community;
     The unique needs of the various demographic groups in the 
proposed community;
     How the credit union will market to each group, 
particularly underserved groups;
     Which community-based organizations the credit union will 
target in its outreach efforts;
     The credit union's marketing budget projections dedicating 
greater resources to reaching new members; and
     The credit union's timetable for implementation, not just 
a calendar of events.
    These requirements will serve to ensure that if the community 
charter is granted, the credit union will be well positioned to safely 
serve the entire community. Additionally, the appropriate regional 
office will follow up with an FCU every year for three years after the 
FCU has been granted a new or expanded community charter, and at any 
other intervals NCUA believes appropriate, to determine if the FCU is 
satisfying the terms of its marketing and business plans. An FCU 
failing to satisfy those terms will be subject to supervisory action. 
As part of this review process, the regional office will report to the 
NCUA Board instances where an FCU is failing to satisfy the terms of 
its marketing and business plan and indicate what administrative 
actions the region intends to take.

[[Page 68728]]

    NCUA recognizes that determining from a marketing plan if an FCU 
has the ability to serve a particular WDLC requires some degree of 
subjectivity, and NCUA believes its substantial experience enables it 
to make that determination. NCUA would prefer, however, to receive 
comments from interested parties on whether there are other more 
objective ways to measure an FCU's ability to serve a particular WDLC.

7. Timing

    NCUA will accept community charter applications based only on 
grandfathered WDLCs, as discussed above, and single political 
jurisdictions between the issuance of this proposal on December 17, 
2009 and the effective date of any final amendments the Board adopts 
regarding the Chartering Manual. NCUA will accept all community charter 
applications, based on any permitted criteria, on or after that 
effective date. Those applications will be considered under the revised 
version of NCUA's community chartering policies as amended by this 
proposal.

8. Emergency Mergers

    Under the emergency merger provision of section 205(h) of the Act, 
the NCUA Board may allow a credit union that is either insolvent or in 
danger of insolvency to merge with another credit union if the NCUA 
Board finds that an emergency requiring expeditious action exists, no 
other reasonable alternatives are available, and the action is in the 
public interest. 12 U.S.C. 1785(h). The Board may approve an emergency 
merger without regard to common bond or other legal constraints, such 
as obtaining the approval of the members of the merging credit union to 
the merger. The emergency merger statute addresses exigent 
circumstances and is intended to serve the public interest and credit 
union members by providing for the continuation of credit union service 
to members from a financially strong credit union.
    NCUA must first determine that a credit union is either insolvent 
or in danger of insolvency before it makes the additional findings that 
an emergency exists, other alternatives are not reasonably available, 
and that the public interest would be served by the merger. The 
statute, however, does not define when a credit union is ``in danger of 
insolvency'' nor has NCUA previously issued a formal definition. NCUA 
now believes it advisable to adopt an objective standard to aid it in 
making the ``in danger of insolvency'' determination. This will provide 
certainty and consistency in how NCUA interprets the standard.
    NCUA believes that a credit union is in danger of insolvency if it 
falls into one or more of the following three categories:
    1. The credit union's net worth is declining at a rate that will 
render it insolvent within 24 months. In NCUA's experience with 
troubled credit unions, the trend line to zero net worth often worsens 
once a credit union actually approaches zero net worth. It is more 
difficult for NCUA to keep the costs to the National Credit Union Share 
Insurance Fund (NCUSIF) low when a credit union is near, or below, zero 
net worth. \1\
---------------------------------------------------------------------------

    \1\ Under NCUA's system of prompt corrective action (PCA), as a 
credit union's net worth declines below minimum requirements, the 
credit union faces progressively more stringent safeguards. The goal 
is to resolve net worth deficiencies promptly, before they become 
more serious, and in any event before they cause losses to the 
NCUSIF. The PCA statute sets forth NCUA's duty to take prompt 
corrective action to resolve the problems of troubled credit unions 
to avoid or minimize loss to the NCUSIF. S. Rpt. No. 193, 105th 
Cong., 2d Sess. 12 (1998); 12 U.S.C. 1790d; 12 CFR part 702.
---------------------------------------------------------------------------

    2. The credit union's net worth is declining at a rate that will 
take it under two percent (2%) net worth within 12 months. A credit 
union with a net worth ratio of less than two percent (2%) falls into 
the PCA category of ``critically undercapitalized.'' 12 U.S.C. 
1790d(c)(1)(E); 12 CFR 702.102(a)(5). Congress, in adding the PCA 
mandates to the Act, created a presumption that a critically 
undercapitalized credit union should be liquidated or conserved if its 
financial condition does not improve within a short period. 12 U.S.C. 
1790d(i); 12 CFR 702.204(c). Note also that NCUA staff reviewed State 
credit union statutes and found that the Illinois Credit Union Act 
defines a credit union as ``in danger of insolvency'' if its net worth 
to asset ratio falls below two percent (2%).\2\ This is the same as the 
critically undercapitalized net worth category under NCUA's PCA 
provisions.
---------------------------------------------------------------------------

    \2\ 17 Ill. Comp. Stat. Ann. 305/1.1. An alternative definition 
of danger of insolvency under the Illinois statute is if the State 
supervisory authority is unable to ascertain, upon examination, the 
true financial condition of the credit union. Id.
---------------------------------------------------------------------------

    3. The credit union's net worth, as self-reported on its Call 
Report, is significantly undercapitalized, and NCUA determines that 
there is no reasonable prospect of the credit union becoming adequately 
capitalized in the succeeding 36 months. A credit union with a net 
worth ratio between two percent (2%) or more but less than four percent 
(4%) falls into the PCA category of ``significantly undercapitalized.'' 
12 U.S.C. 1790d(c)(1)(D); 12 CFR 702.102(a)(4). A credit union with a 
net worth ratio of six percent (6%) falls into the PCA category of 
``adequately capitalized.'' 12 U.S.C. 1709d(c)(1)(B); 12 CFR 
702.102(a)(2).
    Section 702.203(c) of NCUA's PCA regulation states:

    Discretionary conservatorship or liquidation if no prospect of 
becoming ``adequately capitalized.'' Notwithstanding any other 
actions required or permitted to be taken under this section, when a 
credit union becomes ``significantly undercapitalized'' * * *, the 
NCUA Board may place the credit union into conservatorship pursuant 
to 12 U.S.C. 1786(h)(1)(F), or into liquidation pursuant to 12 
U.S.C. 1787(a)(3)(A)(i), provided that the credit union has no 
reasonable prospect of becoming ``adequately capitalized.''

    12 CFR 702.203(c). An example of no reasonable prospect of becoming 
adequately capitalized would be a credit union's inability, after 
working with NCUA, to demonstrate how it would restore net worth to 
this level. This could include the credit union's failure, after 
working with NCUA, and considering both possible increases in retained 
earnings and decreases in assets, to develop an acceptable Net Worth 
Restoration Plan (NWRP). It could also include the credit union's 
failure, after working with NCUA, to materially comply with an approved 
NWRP. In either case, NCUA must document that the credit union is 
unable to become adequately capitalized within a 36-month timeframe.

E. Regulatory Procedures

Regulatory Flexibility Act

    The Regulatory Flexibility Act requires NCUA to prepare an analysis 
to describe any significant economic impact a regulation may have on a 
substantial number of small credit unions, primarily those under ten 
million dollars in assets. The proposed amendments will not have a 
significant economic impact on a substantial number of small credit 
unions and therefore, a regulatory flexibility analysis is not 
required.

Paperwork Reduction Act

    In accordance with the requirements of the Paperwork Reduction Act 
of 1995 (PRA), NCUA may not conduct or sponsor, and the respondent is 
not required to respond to, an information collection unless it 
displays a currently valid OMB control number. The OMB control number 
assigned to Sec.  701.1 is 3133-0015, and to the forms included in 
Appendix D is 3133-0116. NCUA has determined that the proposed 
amendments will not increase paperwork requirements and a

[[Page 68729]]

paperwork reduction analysis is not required.

Executive Order 13132

    Executive Order 13132 encourages independent regulatory agencies to 
consider the impact of their actions on State and local interests. In 
adherence to fundamental federalism principles, NCUA, an independent 
regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies 
with the executive order. The proposed rule would not have substantial 
direct effects on the States, on the connection between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government. NCUA has 
determined that the proposed rule does not constitute a policy that has 
federalism implications for purposes of the executive order because it 
only applies to Federal credit unions.

The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families

    The NCUA has determined that the proposed rule would not affect 
family well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act of 1999, Public Law 105-277, 112 
Stat. 2681 (1998).

List of Subjects in 12 CFR Part 701

    Credit, Credit unions, Reporting and recordkeeping requirements.

    By the National Credit Union Administration Board on December 
17, 2009.
Mary Rupp,
Secretary of the Board.

    For the reasons discussed above, NCUA proposes to amend 12 CFR part 
701 as follows:

PART 701--ORGANIZATION AND OPERATIONS OF FEDERAL CREDIT UNION

    1. The authority citation for part 701 continues to read as 
follows:

    Authority: 12 U.S.C. 1752(5), 1755, 1756, 1757, 1759, 1761a, 
1761b, 1766, 1767, 1782, 1784, 1787, 1789. Section 701.6 is also 
authorized by 15 U.S.C. 3717. Section 701.31 is also authorized by 
15 U.S.C. 1601, et seq., 42 U.S.C. 1981 and 3601-3610. Section 
701.35 is also authorized by 12 U.S.C. 4311-4312.
    2. Section 701.1 is revised to read as follows:


Sec.  701.1  Federal credit union chartering, field of membership 
modifications, and conversions.

    National Credit Union Administration policies concerning 
chartering, field of membership modifications, and conversions, also 
known as the Chartering and Field of Membership Manual, are set forth 
in appendix B to this part and are available on-line at https://www.ncua.gov .
    3. The first paragraph of Section II.D.2. of Chapter 2 of appendix 
B to part 701 is revised to read as follows:

Appendix B to Part 701--Chartering and Field of Membership Manual

* * * * *

II.D.2--Emergency Mergers

    An emergency merger may be approved by NCUA without regard to 
common bond or other legal constraints. An emergency merger involves 
NCUA's direct intervention and approval. The credit union to be 
merged must either be insolvent or in danger of insolvency, as 
defined in the Glossary, and NCUA must determine that:
     An emergency requiring expeditious action exists;
     Other alternatives are not reasonably available; and
     The public interest would best be served by approving 
the merger.
* * * * *
    4. The first paragraph of Section III.D.2. of Chapter 2 of appendix 
B to part 701 is revised to read as follows:

III.D.2--Emergency Mergers

    An emergency merger may be approved by NCUA without regard to 
common bond or other legal constraints. An emergency merger involves 
NCUA's direct intervention and approval. The credit union to be 
merged must either be insolvent or in danger of insolvency, as 
defined in the Glossary, and NCUA must determine that:
     An emergency requiring expeditious action exists;
     Other alternatives are not reasonably available; and
     The public interest would best be served by approving 
the merger.
* * * * *
    5. The first paragraph of Section IV.D.3. of Chapter 2 of appendix 
B to part 701 is revised to read as follows:

IV.D.3--Emergency Mergers

    An emergency merger may be approved by NCUA without regard to 
common bond or other legal constraints. An emergency merger involves 
NCUA's direct intervention and approval. The credit union to be 
merged must either be insolvent or in danger of insolvency, as 
defined in the Glossary, and NCUA must determine that:
     An emergency requiring expeditious action exists;
     Other alternatives are not reasonably available; and
     The public interest would best be served by approving 
the merger.
* * * * *
    6. Section V.A. of Chapter 2 of appendix B to part 701 is revised 
to read as follows:

Chapter 2

V.A.1--General

    There are two types of community charters. One is based on a 
single, geographically well-defined local community or neighborhood; 
the other is a rural district. More than one credit union may serve 
the same community.
    NCUA recognizes four types of affinity on which a community 
charter can be based--persons who live in, worship in, attend school 
in, or work in the community. Businesses and other legal entities 
within the community boundaries may also qualify for membership.
    NCUA has established the following requirements for community 
charters:
     The geographic area's boundaries must be clearly 
defined; and
     The area is a well-defined local community or a rural 
district.

V.A.2--Definition of Well-Defined Local Community and Rural District

    In addition to the documentation requirements in Chapter 1 to 
charter a credit union, a community credit union applicant must 
provide additional documentation addressing the proposed area to be 
served and community service policies.
    An applicant has the burden of demonstrating to NCUA that the 
proposed community area meets the statutory requirements of being: 
(1) Well-defined, and (2) a local community or rural district.
    ``Well-defined'' means the proposed area has specific geographic 
boundaries. Geographic boundaries may include a city, township, 
county (single, multiple, or portions of a county) or their 
political equivalent, school districts, or a clearly identifiable 
neighborhood. Although congressional districts and State boundaries 
are well-defined areas, they do not meet the requirement that the 
proposed area be a local community or rural district.
    The well-defined local community requirement is met if:
     Single Political Jurisdiction--The area to be served is 
in a recognized single political jurisdiction, i.e., a city, county, 
or their political equivalent, or any contiguous portion thereof.
     Statistical Area--
     The area is a designated Core Based Statistical Area 
(CBSA) or part thereof, or in the case of a CBSA with Metropolitan 
Divisions, the area is a Metropolitan Division or part thereof; and
     The area contains a city, county or equivalent with a 
majority of all jobs in the CBSA or metropolitan division; and
     The city, county or equivalent contains at least \1/3\ 
of the CBSA's or metropolitan division's total population; and
     The area must have a population of 2.5 million or less 
people.
    The rural district requirement is met if:
     Rural District--
     The district has well-defined, contiguous geographic 
boundaries;
     More than 50% of the district's population resides in 
census blocks or other geographic areas that are designated as rural 
by the United States Census Bureau; and
     The total population of the district does not exceed 
100,000 people.

[[Page 68730]]

    The OMB definitions of CBSA and Metropolitan Division may be 
found at 65 FR 82238 (Dec. 27, 2000). They are incorporated herein 
by reference. Access to these definitions is available through the 
main page of the Federal Register Web site at https://www.gpoaccess.gov/fr/ and on NCUA's Web site at https://www.ncua.gov.
    The requirements in Chapter 2, Sections V.A.4 through V.G. also 
apply to a credit union that serves a rural district.

V.A.3--Previously Approved Communities

    If prior to -------- (insert effective date of final amendments) 
NCUA has determined that a specific geographic area is a well 
defined local community, then a new applicant need not reestablish 
that fact as part of its application to serve the exact area. The 
new applicant must, however, note NCUA's previous determination as 
part of its overall application. An applicant applying for an area 
after that date that is not exactly the same as the previously 
approved well defined local community must comply with the current 
criteria in place for determining a well defined local community.

V.A.4--Business Plan Requirements for a Community Credit Union

    A community credit union is frequently more susceptible to 
competition from other local financial institutions and generally 
does not have substantial support from any single sponsoring company 
or association. As a result, a community credit union will often 
encounter financial and operational factors that differ from an 
occupational or associational charter. Its diverse membership may 
require special marketing programs targeted to different segments of 
the community. For example, the lack of payroll deduction creates 
special challenges in the development and promotion of savings 
programs and in the collection of loans. Accordingly, to support an 
application for a community charter, an applicant Federal credit 
union must develop a business plan incorporating the following data:
     Pro forma financial statements for a minimum of 24 
months after the proposed conversion, including the underlying 
assumptions and rationale for projected member, share, loan, and 
asset growth;
     Anticipated financial impact on the credit union, 
including the need for additional employees and fixed assets, and 
the associated costs;
     A description of the current and proposed office/branch 
structure, including a general description of the location(s); 
parking availability, public transportation availability, drive-
through service, lobby capacity, or any other service feature 
illustrating community access;
     A marketing plan addressing how the community will be 
served for the 24-month period after the proposed conversion to a 
community charter, including detailing: how the credit union will 
implement its business plan; the unique needs of the various 
demographic groups in the proposed community; how the credit union 
will market to each group, particularly underserved groups; which 
community-based organizations the credit union will target in its 
outreach efforts; the credit union's marketing budget projections 
dedicating greater resources to reaching new members; and the credit 
union's timetable for implementation, not just a calendar of events;
     Details, terms and conditions of the credit union's 
financial products, programs, and services to be provided to the 
entire community; and
     Maps showing the current and proposed service 
facilities, ATMs, political boundaries, major roads, and other 
pertinent information.
    An existing Federal credit union may apply to convert to a 
community charter. Groups currently in the credit union's field of 
membership, but outside the new community credit union's boundaries, 
may