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The Economic Welfare Implications of the Regulation Restricting Non-Multiple Bond Federal Credit Unions from Entering Underserved Markets

The National Credit Union Administration (NCUA) revised its field of membership regulations so that only credit unions with multiple common-bond charters can serve financially underserved areas. This report looks at the implications of this regulation.

  • William E. Jackson III Smith Foundation Endowed Chair of Business Integrity, Culverhouse College of Business at University of Alabama

Executive Summary

From time to time, Filene Research Institute is asked to explore credit union public policy issues. This research report exposes a particularly contentious regulation that limits the addition of financially underserved areas to credit unions with multiple common-bond charters. Over 50% of all credit unions do not hold this specific charter, thereby limiting the ability of a majority of credit unions to serve underserved consumers.

What is the research about?

Filene enlisted the expertise of William E. Jackson III, PhD, a professor at the University of Alabama and an authority on financial institution policy, to determine the efficacy of this particular regulation. The following report is Dr. Jackson’s analysis and commentary on this topic. 

What are the credit union implications?

Unlike other reports produced by the Filene Research Institute, this document does not offer many managerial implications or strategic discussions. This report simply asks, is this regulation good public policy?