WEBVTT NOTE This file was generated by Descript 00:00:00.470 --> 00:00:02.370 Samantha: Hello, this is Samantha Shares. 00:00:02.950 --> 00:00:06.450 This episode covers N C U A's board briefing on Field of 00:00:06.450 --> 00:00:08.610 Membership also known as F O M. 00:00:09.311 --> 00:00:12.761 The following is an audio version of that briefing in their own voice. 00:00:13.281 --> 00:00:16.441 This podcast is educational and is not legal advice. 00:00:16.901 --> 00:00:20.911 We are sponsored by Credit Union Exam Solutions Incorporated, whose 00:00:20.911 --> 00:00:23.911 team has over two hundred and Forty years of National Credit 00:00:23.911 --> 00:00:25.831 Union Administration experience. 00:00:26.351 --> 00:00:30.041 We assist our clients with N C U A so they save time and money. 00:00:30.471 --> 00:00:34.431 If you are worried about a recent, upcoming or in process N C U A 00:00:34.431 --> 00:00:38.781 examination, reach out to learn how they can assist at Mark Treichel DOT COM. 00:00:39.151 --> 00:00:43.511 Also check out our other podcast called With Flying Colors where we provide tips 00:00:43.511 --> 00:00:46.091 on how to achieve success with N C U A. 00:00:46.807 --> 00:00:47.837 And now the briefing. 00:00:48.110 --> 00:00:51.600 Todd Harper: The final item, um, today is the new Charter and Field 00:00:51.600 --> 00:00:55.030 of Membership update that was requested by Vice Chairman Hoffman. 00:00:55.395 --> 00:01:00.075 Staff presenting, um, this board briefing include Martha Nenechuk, Director, 00:01:00.105 --> 00:01:05.085 Office of Credit Union Resources and Expansion, and Leilani Stamper, Consumer 00:01:05.085 --> 00:01:08.945 Access Division Director, Office of Credit Union Resources and Expansion. 00:01:09.355 --> 00:01:10.605 Good morning, Martha. 00:01:10.665 --> 00:01:11.975 Good morning, Leilani. 00:01:12.185 --> 00:01:13.735 Always good to see both of you. 00:01:14.015 --> 00:01:15.175 Please begin when you're ready. 00:01:15.335 --> 00:01:15.835 Martha Ninichuk: Thank you. 00:01:16.445 --> 00:01:20.085 Good morning, Chairman Harper, Vice Chairman Hoffman, and Board Member Otsuka. 00:01:20.265 --> 00:01:23.405 Thank you for this opportunity to speak today about our continued 00:01:23.415 --> 00:01:27.615 efforts to improve processes and support the development of new federal 00:01:27.615 --> 00:01:31.415 credit unions and the expansion of established federal credit unions. 00:01:31.845 --> 00:01:33.105 Slide two, please. 00:01:34.105 --> 00:01:37.665 Today's briefing focuses on new charter application data for 2024, 00:01:38.345 --> 00:01:42.555 process improvements in chartering, The Provisional Charter Pilot and 00:01:42.555 --> 00:01:45.605 Field of Membership Updates, Slide 3. 00:01:46.605 --> 00:01:50.945 Peer analysis of new charter applications ensures their compliance with the Federal 00:01:50.945 --> 00:01:57.095 Credit Union Act, Section 1753, and the regulations governing new charters, 00:01:57.785 --> 00:02:03.595 12 CFR Part 701, Organization and Operation of Federal Credit Unions, and 00:02:03.595 --> 00:02:10.515 12 CFR Part 701 Appendix B, Charter and Field of Membership Manual, Slide 4. 00:02:11.515 --> 00:02:15.205 I should note for those organizing groups seeking a state charter, the 00:02:15.215 --> 00:02:19.075 charter approval process is through its state supervisory authority. 00:02:19.555 --> 00:02:23.095 If an applicant also seeks to have the state chartered credit union federally 00:02:23.095 --> 00:02:27.285 insured, they'll need to submit an insurance application to the NCOA. 00:02:27.910 --> 00:02:31.690 The NCOA will review the application, including the business and marketing 00:02:31.690 --> 00:02:36.270 plan for insurability, and will conduct a background and review of credit 00:02:36.300 --> 00:02:41.000 officials and senior staff if the SSA does not provide this information. 00:02:41.840 --> 00:02:46.210 Federal share insurance approval will be contingent upon the applicant obtaining 00:02:46.240 --> 00:02:48.940 SSA approval of its state charter. 00:02:49.730 --> 00:02:52.580 Additional information for insuring new state charters 00:02:52.580 --> 00:02:54.750 is found on our NCOA website. 00:02:55.350 --> 00:03:00.900 Under support services, credit union resources, and expansion and new charters. 00:03:00.990 --> 00:03:02.220 Slide five. 00:03:03.220 --> 00:03:09.210 Slide five reflects the number of credit unions chartered since 2018 during 2024. 00:03:09.210 --> 00:03:13.050 The NCUA chartered three credit unions with the hope to, uh, have 00:03:13.050 --> 00:03:14.790 four chartered by the end of the year. 00:03:15.630 --> 00:03:18.780 Two of the four are participants in the provisional charter pilot. 00:03:19.260 --> 00:03:22.560 You'll hear more about the pilot later in this presentation. 00:03:23.200 --> 00:03:27.900 In 2024, one state chartered credit union was approved, but it is not 00:03:27.900 --> 00:03:30.570 included in the federal charter numbers as shown on slide 5. 00:03:30.570 --> 00:03:33.210 Slide 6, please. 00:03:34.210 --> 00:03:38.320 Slide 6 reflects the average number of days to review a complete application to 00:03:38.320 --> 00:03:40.610 charter, or excuse me, to approve charter. 00:03:41.515 --> 00:03:47.205 The average review and approval time in 2023 was 152 days compared 00:03:47.205 --> 00:03:50.525 to 215 days so far in 2024. 00:03:51.525 --> 00:03:55.325 Over the last 12 months, CURE has seen an increase in the number of unique 00:03:55.325 --> 00:04:00.015 new charter applications with concepts that take additional time for review. 00:04:00.965 --> 00:04:04.895 For those applications that are more complex, CURE works with subject 00:04:04.895 --> 00:04:07.015 matter experts within the agency. 00:04:07.360 --> 00:04:09.570 As well as the Office of General Counsel. 00:04:10.570 --> 00:04:14.400 2024 was also the year the Provisional Pilot was launched, requiring 00:04:14.400 --> 00:04:19.370 additional time by staff working with organizing groups in the pilot program. 00:04:20.370 --> 00:04:24.050 Staff work with organizing groups with the intent of approving the charter. 00:04:24.480 --> 00:04:28.690 Not only are they focused on getting the organizing group to a yes, but also 00:04:28.720 --> 00:04:30.610 on providing good customer service. 00:04:31.610 --> 00:04:32.700 Slide seven, please. 00:04:33.700 --> 00:04:37.360 Over the last five years, field of memberships for newly chartered credit 00:04:37.360 --> 00:04:43.880 unions include Two, multiple common bond, seven single multiple common bonds. 00:04:44.350 --> 00:04:48.730 So far in 2024, there are a total of three new charters. 00:04:49.470 --> 00:04:53.930 One a single, one, single associational, and two community charters. 00:04:54.930 --> 00:04:55.560 Slide eight. 00:04:56.560 --> 00:05:00.700 The data shown on slide eight represents those actions taken in 2024. 00:05:01.430 --> 00:05:04.520 In other words, application actions this year may have been from 00:05:04.520 --> 00:05:07.280 applications received prior to 2024. 00:05:07.930 --> 00:05:12.890 But to date, in 2024, 14 new charter applications have been reviewed, 00:05:13.480 --> 00:05:19.090 3 out of the 14 applications were approved, 1 was denied, 6 were deferred, 00:05:19.430 --> 00:05:21.110 and 1 application was withdrawn. 00:05:21.870 --> 00:05:24.650 Currently, CURE has 3 applications under review. 00:05:25.650 --> 00:05:29.590 New charter process improvements implemented last year have been helpful 00:05:29.590 --> 00:05:35.050 in providing more transparent instruction to organizing groups as they move 00:05:35.050 --> 00:05:37.060 through the three phases of chartering. 00:05:38.060 --> 00:05:41.490 Newly developed management tools are used by CURE to assess the 00:05:41.490 --> 00:05:43.060 status of new charter requests. 00:05:44.060 --> 00:05:48.000 And board offices and the Office of Executive Director to provide 00:05:48.120 --> 00:05:50.300 monthly progress, progress updates. 00:05:51.300 --> 00:05:54.950 At this time, I'd like to turn the presentation over to Leilani Stamper, C. 00:05:54.950 --> 00:05:54.970 U. 00:05:54.970 --> 00:05:54.990 R. 00:05:54.990 --> 00:05:55.000 E. 00:05:55.000 --> 00:05:58.070 's Consumer Access Division Director, to provide an update 00:05:58.200 --> 00:05:59.610 on the Provisional Charter Pilot. 00:06:00.610 --> 00:06:01.540 Lalani: Thank you, Martha. 00:06:01.700 --> 00:06:07.290 And good morning, Chairman Harper, Vice Chairman Hottman, and Board Member Otsuka. 00:06:08.200 --> 00:06:12.220 I would like to take a few minutes to update you on the NCWA Provisional Charter 00:06:12.220 --> 00:06:14.860 Program and the implementation of the. 00:06:14.995 --> 00:06:22.435 Last year, the Provisional Charter concept was established to address 00:06:22.455 --> 00:06:27.005 organizing groups challenges to secure startup capital due 00:06:27.005 --> 00:06:28.965 to it not being a legal entity. 00:06:29.805 --> 00:06:34.205 A Provisional Charter is a stage in the post chartering process where 00:06:34.205 --> 00:06:38.985 credit union organizing groups become a legal entity but have limited 00:06:39.035 --> 00:06:43.925 authority until securing capital levels estimated in their business plan. 00:06:44.925 --> 00:06:50.155 The credit will be given approximately 12 months to secure additional capital and 00:06:50.155 --> 00:06:54.855 meet other requirements as stated in the letter of understanding and agreement. 00:06:55.855 --> 00:06:57.015 Next slide, please. 00:06:58.015 --> 00:07:01.925 CURE successfully developed and implemented a pilot program for 00:07:01.925 --> 00:07:06.485 the Provisional Charter Concept during the third quarter of 2023. 00:07:07.385 --> 00:07:11.015 The selection process for the candidates to participate in the 00:07:11.015 --> 00:07:16.705 pilot program involved a thorough analysis of 63 organizing groups 00:07:16.935 --> 00:07:19.045 that had completed their Phase 1. 00:07:20.045 --> 00:07:25.440 Selection criteria included a pre approved field of membership, One organizing 00:07:25.440 --> 00:07:32.060 group per region, the field of membership size, their funding strategies, and upon 00:07:32.060 --> 00:07:37.474 analysis, whether, whether the proposed credient had a strong potential or not. 00:07:37.935 --> 00:07:40.215 For growth and success. 00:07:41.075 --> 00:07:45.715 Ultimately, CURE chose four qualified candidates for the pilot program. 00:07:46.565 --> 00:07:47.575 Next slide please. 00:07:48.575 --> 00:07:53.185 To date, CURE has chartered two of the four selected candidates. 00:07:53.675 --> 00:07:57.555 The two federally chartered credit unions are Tribe Federal Credit Union 00:07:57.835 --> 00:07:59.975 and Fairbreak Federal Credit Union. 00:08:00.145 --> 00:08:06.085 Tribe Federal Credit Union is a minority depository low income 00:08:06.085 --> 00:08:10.615 designated credit union serving the city of Minneapolis, Minnesota. 00:08:11.615 --> 00:08:16.395 Fairbrake Federal Credit is a minority depository, low income crediting, 00:08:16.665 --> 00:08:18.825 serving Memphis, Tennessee area. 00:08:19.785 --> 00:08:23.345 Both creditings will have one year to obtain the required donated 00:08:23.345 --> 00:08:26.275 capital to become fully operational. 00:08:27.245 --> 00:08:32.145 If they fail to reach their targeted capital levels within a year, each 00:08:32.165 --> 00:08:35.985 regional staff will decide to either extend the provisional period. 00:08:36.440 --> 00:08:38.760 merge or liquidate the credit union. 00:08:39.730 --> 00:08:45.200 Among the two remaining applicants, one submitted their Phase 2 application in 00:08:45.200 --> 00:08:51.010 the third quarter of 2024, while the other chose to withdraw from the pilot program. 00:08:52.010 --> 00:08:56.390 We intend to review the pilot program at the end of 2024 and 00:08:56.390 --> 00:09:00.430 provide recommendations for the program's future in 2025. 00:09:01.060 --> 00:09:06.440 NCUA sees the provision of charter program and our phased chartering process as 00:09:06.460 --> 00:09:11.920 proven examples of NCUA working to find solutions to charter new credit unions. 00:09:12.520 --> 00:09:14.700 That concludes my remarks at this time. 00:09:14.970 --> 00:09:17.620 Martha will provide an update on field of membership. 00:09:18.460 --> 00:09:19.190 Martha Ninichuk: Thanks Leilani. 00:09:19.760 --> 00:09:20.930 Uh, slide 12 please. 00:09:21.930 --> 00:09:24.690 CURE continues to improve its field of membership application 00:09:24.690 --> 00:09:26.010 process for credit unions. 00:09:26.370 --> 00:09:30.040 Beginning in July of this year, CURE implemented a new process using 00:09:30.040 --> 00:09:34.510 the Capri Internet System, allowing multiple common bond credit unions to 00:09:34.510 --> 00:09:39.150 add all occupational and associational groups to their field of membership by 00:09:39.170 --> 00:09:43.790 inputting the group's information and uploading documents, if applicable. 00:09:44.400 --> 00:09:50.030 By enhancing the Capri system, credit unions can now add all groups of any size 00:09:50.380 --> 00:09:52.440 for multiple common bond credit unions. 00:09:53.440 --> 00:09:57.660 A future enhancement for the Capri system will allow credit unions to upload 00:09:57.660 --> 00:10:02.910 their community and underserved area application with supporting documentation. 00:10:03.350 --> 00:10:06.970 The target date for release of this update is first quarter 2025. 00:10:06.970 --> 00:10:08.849 Slide 13. 00:10:09.849 --> 00:10:12.859 This slide shows the field of membership actions approved in 2024. 00:10:13.859 --> 00:10:20.999 As you can see, over 7, 200 internet applications were approved so far in 2024. 00:10:21.999 --> 00:10:22.829 Slide 14. 00:10:23.829 --> 00:10:27.519 Slide 14 breaks down the underserved area applications. 00:10:28.269 --> 00:10:31.619 CURE continues to see an increase in the number of applications 00:10:31.619 --> 00:10:33.189 to add underserved areas. 00:10:34.049 --> 00:10:38.269 The top line of the chart, underserved area applications processed, 00:10:38.269 --> 00:10:43.309 reflects the total total number of applications reviewed by CURE analysts 00:10:43.489 --> 00:10:46.279 from 2020 to 2024 year to date. 00:10:47.074 --> 00:10:51.094 The second line reflects the total number of applications approved. 00:10:51.594 --> 00:10:55.234 Line three reflects the number of application deferrals, with 00:10:55.234 --> 00:10:59.354 the last line reflecting the number of applications withdrawn. 00:11:00.354 --> 00:11:05.264 The increase in number of underserved applications from 32 applications in 00:11:05.654 --> 00:11:12.859 2020 to 87 applications so far this year is a significant increase, especially 00:11:12.859 --> 00:11:17.179 when the complexity of the underserved application is taken into consideration. 00:11:17.639 --> 00:11:19.889 The resulting workload is significant. 00:11:20.889 --> 00:11:24.619 Cure analysts allocate a large number of hours working with credit unions 00:11:24.649 --> 00:11:26.539 on their underserved applications. 00:11:27.179 --> 00:11:35.279 For example, as of September 30th, 2024, Analysts spent approximately 10, 440 hours 00:11:35.299 --> 00:11:38.219 processing 87 underserved applications. 00:11:39.009 --> 00:11:43.389 When a credit union's application is deferred and resubmitted, the analyst's 00:11:43.389 --> 00:11:45.389 review time could potentially double. 00:11:46.389 --> 00:11:50.089 We have heard industry concerns about the time it takes to approve 00:11:50.089 --> 00:11:51.679 these complex applications. 00:11:52.389 --> 00:11:56.999 CURE continues to manage workload by assigning applications based on complexity 00:11:57.459 --> 00:11:59.959 and number of all pending applications. 00:12:00.849 --> 00:12:04.809 Cure analysts continue, excuse me, Cure analysts will continue to work with the 00:12:04.809 --> 00:12:10.449 credit unions to ensure applications meet all underserved area requirements. 00:12:10.849 --> 00:12:13.944 And the NCUA will continue to support, support, though. 00:12:14.304 --> 00:12:18.624 process changes that provide positive customer experiences. 00:12:19.624 --> 00:12:23.774 In conclusion, the NCOA has supported the growth of newly chartered and field 00:12:23.774 --> 00:12:28.254 of membership expansions of already established credit unions by streamlining 00:12:28.284 --> 00:12:32.444 much of the application process in addition to providing guidance and 00:12:32.484 --> 00:12:37.274 information resources to credit unions as they move through the application process. 00:12:38.074 --> 00:12:41.984 It is hoped credit unions are better able to understand the NCUA regulatory 00:12:41.984 --> 00:12:46.184 requirements and recognize an overall improvement in transparency 00:12:46.184 --> 00:12:48.444 of the applications review process. 00:12:48.824 --> 00:12:51.984 Thank you for your time today, and we are ready to address your questions. 00:12:52.714 --> 00:12:56.654 Todd Harper: Thank you so much, Martha and Leilani, for your briefing on new charters 00:12:56.694 --> 00:12:58.294 and field of membership expansions. 00:12:59.144 --> 00:13:02.754 And thank you to the entire team and the Office of Credit Union 00:13:03.074 --> 00:13:04.814 Resources and Expansion, or C. 00:13:04.814 --> 00:13:04.834 U. 00:13:05.084 --> 00:13:05.284 R. 00:13:05.294 --> 00:13:09.794 E., for short, for your continued work to support the growth and development of 00:13:09.794 --> 00:13:14.224 credit unions of all sizes, but especially the efforts of small credit unions. 00:13:14.644 --> 00:13:19.894 Low income credit unions, minority depository institutions, and credit unions 00:13:19.894 --> 00:13:24.564 that seek to deepen access to safe, fair, and affordable financial products and 00:13:24.564 --> 00:13:27.254 services in under resourced communities. 00:13:27.904 --> 00:13:31.554 Here's work in supporting the chartering of new credit unions and any credit 00:13:31.564 --> 00:13:33.174 union seeking charter changes. 00:13:33.235 --> 00:13:37.454 This bylaw and this field of membership expansions and low income 00:13:37.764 --> 00:13:42.724 designations is vital to a healthy and diverse financial system. 00:13:43.184 --> 00:13:48.724 And work delivering online training and resources and providing grants and loans 00:13:49.024 --> 00:13:52.714 through the Community Development and Revolving Loan Fund enables eligible 00:13:52.714 --> 00:13:56.414 credit unions to better serve their members and communities financial needs. 00:13:56.934 --> 00:14:01.484 In short, Cure's work aims to create a financial system that works for 00:14:01.494 --> 00:14:06.394 all, a philosophy that underlies the purpose of the credit union movement. 00:14:07.044 --> 00:14:10.654 As noted earlier, the agency has approved three new charters thus far 00:14:10.874 --> 00:14:16.484 in 2024, in addition to providing share insurance to one new state charter. 00:14:16.934 --> 00:14:19.964 There are also three new charter applications under review. 00:14:20.604 --> 00:14:24.704 Three or four new charters per year may not sound like a lot, but 00:14:24.704 --> 00:14:28.494 it represents positive momentum and aligns with historic trends. 00:14:29.064 --> 00:14:33.444 Undoubtedly, the emergence of non depository financial institutions 00:14:33.474 --> 00:14:36.854 and fintechs, as well as the pressure to achieve economies of 00:14:36.854 --> 00:14:40.914 scale, are contributing to the low number of organizing groups seeking 00:14:40.934 --> 00:14:42.554 to charter a new credit union. 00:14:42.904 --> 00:14:47.834 And while the NCUA cannot alter this economic reality, we are making 00:14:47.834 --> 00:14:49.924 strides in the areas we can change. 00:14:50.234 --> 00:14:54.314 Namely, assisting prospective credit union organizing groups with gaining 00:14:54.314 --> 00:14:57.494 the required capital, as well as streamlining and reducing the 00:14:57.494 --> 00:14:59.254 length of the chartering process. 00:14:59.864 --> 00:15:04.744 The NCUA's provisional chartering program allows organizing groups to show that 00:15:04.744 --> 00:15:09.424 they have the capacity to start a credit union, which in turn could facilitate 00:15:09.424 --> 00:15:11.444 their efforts to raise needed capital. 00:15:11.444 --> 00:15:17.284 As NCUA has already approved two provisional charters, and another is in 00:15:17.294 --> 00:15:19.244 phase two of the application process. 00:15:20.029 --> 00:15:23.659 Decreasing the average number of days from the receipt of a complete 00:15:23.659 --> 00:15:28.429 application to an improved charter certainly modernizes, facilitates, and 00:15:28.429 --> 00:15:30.179 streamlines the chartering process. 00:15:30.729 --> 00:15:34.439 A contributing factor to the overall reduction in the review 00:15:34.449 --> 00:15:38.839 process includes Cure's automated management system for chartering. 00:15:39.139 --> 00:15:44.689 And although the average number of days is up in 2024, the time to complete 00:15:44.689 --> 00:15:46.619 the process today is well below. 00:15:46.874 --> 00:15:50.114 The levels that we saw in 2018 and 2020. 00:15:50.424 --> 00:15:53.444 So thank you for your good work and leadership in that. 00:15:54.014 --> 00:15:57.214 By facilitating the process through which credit union organizers 00:15:57.514 --> 00:16:00.754 can access the initial capital needed for capital standards. 00:16:01.144 --> 00:16:05.244 loss reserves and operating expenses and streamlining and 00:16:05.344 --> 00:16:07.154 automating the application process. 00:16:07.454 --> 00:16:11.574 The NCOA is making it easier and supporting promising organizing 00:16:11.574 --> 00:16:13.354 groups to form a credit union. 00:16:14.354 --> 00:16:19.514 Obtaining a credit union charter, however, is not supposed to be easy or simplistic. 00:16:19.924 --> 00:16:23.934 With a charter comes the responsibility to promote financial well being of 00:16:23.934 --> 00:16:25.189 members in a safe and secure manner. 00:16:25.329 --> 00:16:27.979 sound and consumer friendly men, uh, manner. 00:16:28.299 --> 00:16:31.499 It also comes with certain compliance requests and needs 00:16:31.499 --> 00:16:32.929 like anti money laundering. 00:16:33.449 --> 00:16:37.659 This delicate balance requires us to both be purposeful and careful. 00:16:38.009 --> 00:16:43.319 Within statutory safety and soundness and consumer protection guardrails, 00:16:43.319 --> 00:16:46.949 the NCUA is committed to working with promising organizing groups 00:16:47.179 --> 00:16:49.499 to get to yes whenever possible. 00:16:50.104 --> 00:16:53.864 Thanks to the works of the CURE team as well as the Vice Chairman's steady 00:16:53.864 --> 00:16:57.544 focus on this priority, and I really do want to thank his steady focus. 00:16:57.944 --> 00:17:02.044 The NCUA has made meaningful strides during the past four years in 00:17:02.044 --> 00:17:07.224 facilitating the chartering process so that organizers can pursue their 00:17:07.224 --> 00:17:09.239 visions of people helping people. 00:17:09.689 --> 00:17:14.489 Welcoming a new credit union into the system of cooperative credit is good, 00:17:14.599 --> 00:17:18.939 not only for the system, but also good for the consumer, many of whom have been 00:17:18.949 --> 00:17:21.389 unbanked or underserved for far too long. 00:17:21.759 --> 00:17:25.159 And the NCUA's mission, in part, is to protect the system of cooperative 00:17:25.159 --> 00:17:29.509 credit and its member owners through effective chartering and supervision. 00:17:30.069 --> 00:17:32.759 Before closing, I do have a few questions for you all. 00:17:33.759 --> 00:17:38.339 First, if we could pull up slide 14, I'd like to get to a better 00:17:38.339 --> 00:17:41.939 understanding about the number of underserved applications. 00:17:41.989 --> 00:17:44.769 It's risen considerably since 2020. 00:17:45.169 --> 00:17:50.209 What, I mean, we went from 32 to 72 to 98, I mean, that's a large jump 00:17:50.209 --> 00:17:51.699 and a large increase in workload. 00:17:51.709 --> 00:17:52.129 It is. 00:17:52.159 --> 00:17:54.289 What, what's behind those numbers? 00:17:55.179 --> 00:17:58.379 Martha Ninichuk: Well, from our viewpoint, our standpoint, there has been a concerted 00:17:58.389 --> 00:18:03.149 effort by the industry to encourage credit unions to expand into underserved areas. 00:18:04.054 --> 00:18:08.084 Many times the underserved areas are banking deserts, which credit unions 00:18:08.084 --> 00:18:09.884 are uniquely structured to serve. 00:18:10.534 --> 00:18:15.434 These areas actually also provide more growth opportunities for credit unions. 00:18:16.264 --> 00:18:19.474 Todd Harper: So it's, it's, it's, it's that our rules have changed. 00:18:19.484 --> 00:18:21.864 We have more applications coming in. 00:18:22.154 --> 00:18:22.274 Yes. 00:18:22.574 --> 00:18:23.784 They're bigger applications. 00:18:23.784 --> 00:18:24.594 They're, they're, 00:18:24.804 --> 00:18:27.844 Martha Ninichuk: Yes, they are larger, um, applications. 00:18:28.054 --> 00:18:31.424 So, multiple, don't forget, multiple common bond credit unions are the only 00:18:31.424 --> 00:18:36.984 type of charter that we can, um, or that is able to add underserved areas. 00:18:37.494 --> 00:18:41.484 Um, so, we see an uptick in multiple common bond credit unions seeking to 00:18:41.494 --> 00:18:46.884 serve underserved areas, um, where they are able to increase more than 2. 00:18:46.885 --> 00:18:47.394 5 million. 00:18:48.014 --> 00:18:52.634 And population, which is more than what a community charter 00:18:52.894 --> 00:18:57.314 is, um, able to add without going through the public hearing process. 00:18:57.774 --> 00:18:58.164 Todd Harper: Right. 00:18:59.164 --> 00:19:04.674 Um, for those credit unions with approved underserved, um, expansion applications, 00:19:04.834 --> 00:19:08.954 I understand that not all of them have opened up the requisite number of branches 00:19:09.094 --> 00:19:15.384 in those underserved areas within 24 months, uh, as required by our rules. 00:19:15.754 --> 00:19:18.274 How is CURE handling those deficiencies? 00:19:19.274 --> 00:19:20.874 Martha Ninichuk: Right, so thank you for that question. 00:19:21.134 --> 00:19:25.254 CURE identifies those credit unions that have not established a service facility 00:19:25.254 --> 00:19:29.444 within two years of adding an underserved area, and that is the requirement. 00:19:29.964 --> 00:19:33.584 CURE sends the credit union a notification inquiring if a 00:19:33.584 --> 00:19:35.304 service facility has been added. 00:19:35.714 --> 00:19:36.934 to the credit union. 00:19:37.344 --> 00:19:40.814 Um, if they have added a service facility, we update our 00:19:40.814 --> 00:19:42.664 database with the information. 00:19:43.214 --> 00:19:47.634 If not, we ask the credit union if they plan to open a service facility, 00:19:47.654 --> 00:19:52.474 and then provide us a service status report to review if the credit union 00:19:52.474 --> 00:19:56.804 has been providing financial services as stated within their original business 00:19:56.814 --> 00:20:00.384 plan received during the Field of Membership Expansion, um, application. 00:20:01.034 --> 00:20:04.869 Ultimately, if a service This facility is not opened and the credit 00:20:04.869 --> 00:20:06.719 union does not plan to open one. 00:20:06.729 --> 00:20:09.719 The underserved areas are removed from the credit union's charter. 00:20:10.199 --> 00:20:11.679 Todd Harper: I think that's an important point. 00:20:11.709 --> 00:20:16.429 I, I, I think of the movie Field of Dreams, if you build it, they will come. 00:20:16.749 --> 00:20:21.479 Um, if you have a plan to serve an underserved area, you need to build it 00:20:21.559 --> 00:20:26.449 so that they will come, uh, and, and, and get access to those financial services. 00:20:26.939 --> 00:20:30.589 Martha, my next set of questions focuses on process. 00:20:30.964 --> 00:20:32.744 If we could pull up slide five. 00:20:33.359 --> 00:20:38.509 Um, that slide shows that in 2024, uh, we chartered one federal credit union 00:20:38.509 --> 00:20:42.809 and issued two provisional charters for a total of three new credit unions. 00:20:43.239 --> 00:20:47.559 What more can be done to shorten the application, uh, to charter process? 00:20:47.559 --> 00:20:52.759 And also, what's the most significant obstacle to obtaining a charter? 00:20:53.079 --> 00:20:54.709 I'm going to punt that to Leilani. 00:20:54.939 --> 00:20:55.429 Okay. 00:20:56.039 --> 00:20:57.509 Leilani, that question. 00:20:57.519 --> 00:20:58.039 Lalani: Sure. 00:20:58.040 --> 00:20:58.319 Sure. 00:20:58.699 --> 00:21:05.119 Well, what we really believe and we would like to continue to encourage Organizing 00:21:05.129 --> 00:21:08.479 groups, um, to really go to our website. 00:21:08.929 --> 00:21:14.439 We have some amazing resources there, one being how to start a new charter 00:21:14.849 --> 00:21:15.059 Kyle Hauptman: with 00:21:15.069 --> 00:21:20.769 Lalani: step by step instructions on that process, um, including as that is 00:21:20.849 --> 00:21:25.569 detailed, each of our phases and what that looks like for the organizer. 00:21:25.799 --> 00:21:30.489 We also have resources and templates that we share on the website. 00:21:30.729 --> 00:21:35.459 So we believe that if the organizers go to our website and get all this 00:21:35.479 --> 00:21:40.454 information, it's When they do finally submit the application, it will be 00:21:40.454 --> 00:21:45.734 cleaner and have all of the required, hopefully all the required information 00:21:45.734 --> 00:21:50.444 needed so that when the coordinators do review it, it's a shorter time. 00:21:51.104 --> 00:21:54.474 Todd Harper: Um, Leilani, first of all, let me give you a shout out, not only 00:21:54.474 --> 00:22:00.414 to the work of the team in CURE, um, but also I know this three phased process. 00:22:00.874 --> 00:22:04.404 was something that originated in our management development program 00:22:04.404 --> 00:22:09.924 and that team, um, uh, really did a great job of re envisioning it. 00:22:10.374 --> 00:22:12.574 Um, Leilani, can you just go a little bit deeper? 00:22:12.574 --> 00:22:16.424 I know that the, uh, Vice Chairman and I often talk about the 00:22:16.424 --> 00:22:17.714 chicken and the egg argument. 00:22:17.784 --> 00:22:19.924 You can't get a charter without the capital and you can't get 00:22:19.924 --> 00:22:21.344 the capital without the charter. 00:22:21.824 --> 00:22:25.174 Um, uh, how is the provisional charter helping that? 00:22:26.174 --> 00:22:29.414 Lalani: Well, We've got two charters, right? 00:22:29.484 --> 00:22:33.434 And so they have hit the with the two that we've chartered. 00:22:33.444 --> 00:22:39.874 They have been actively trying to get grants and Actively trying to see 00:22:39.934 --> 00:22:42.194 if loans are possible and sub debt. 00:22:42.464 --> 00:22:46.694 So we're in kind of this um, Research phase. 00:22:46.694 --> 00:22:51.994 Research phase to see what works and what doesn't work, um, but we're hopeful. 00:22:52.974 --> 00:22:57.964 We are hopeful that, um, we will be able to, uh, bring a recommendation that 00:22:57.964 --> 00:22:59.734 we would like to continue the program. 00:22:59.794 --> 00:23:00.054 Todd Harper: Yeah. 00:23:00.454 --> 00:23:04.264 So, um, uh, you may not know this, but my dad started a 00:23:04.264 --> 00:23:06.494 teacher's credit union in 1967. 00:23:06.714 --> 00:23:10.674 His dad started a credit union at a soap factory in 1934. 00:23:11.144 --> 00:23:15.554 Um, and certainly, we've seen greater complexity. 00:23:15.974 --> 00:23:21.234 Do these provisional charters have the, um, policies and procedures 00:23:21.234 --> 00:23:25.124 that we would expect a credit union to have in getting started before 00:23:25.124 --> 00:23:26.394 they get the provisional charter? 00:23:26.395 --> 00:23:27.124 They do. 00:23:27.414 --> 00:23:32.384 Lalani: And then once they are chartered, our field, um, examiner works closely 00:23:32.384 --> 00:23:36.834 with them to ensure that the policies and procedures that they need to move 00:23:36.834 --> 00:23:39.004 their operations forward are in place. 00:23:39.084 --> 00:23:39.684 Todd Harper: That's great. 00:23:39.934 --> 00:23:43.914 Um, one other question I have is I, you talked about the number of 00:23:43.914 --> 00:23:49.624 deferrals, uh, uh, that we've seen, um, uh, on, uh, the new charters. 00:23:49.864 --> 00:23:52.064 What's the reasoning behind these deferrals? 00:23:52.714 --> 00:23:55.434 Martha Ninichuk: Well, most times deferrals are, you know, um, 00:23:56.194 --> 00:23:58.364 Come from a myriad of reasons. 00:23:58.434 --> 00:24:05.434 Um, there's different components to the application, um, but mainly, the business 00:24:05.444 --> 00:24:10.434 plan is not supported, uh, in full by the other components of the application, 00:24:10.864 --> 00:24:12.604 so they don't all tie together. 00:24:12.854 --> 00:24:15.774 So they have a business plan, a marketing plan that doesn't tie in. 00:24:16.054 --> 00:24:18.064 They have a performance statement also. 00:24:18.479 --> 00:24:21.249 Um, you know, that projects over five years. 00:24:21.879 --> 00:24:25.529 That data doesn't support the products and services that they want to offer. 00:24:25.949 --> 00:24:30.179 I mean, it is a complex process, as you said, starting a, a new charter 00:24:30.179 --> 00:24:32.409 is not necessarily an easy task. 00:24:32.759 --> 00:24:39.139 Um, but for each deferral, we write explicit directions on what, uh, the 00:24:39.139 --> 00:24:42.839 organizing group or if a credit union has a field of membership deferral, 00:24:43.199 --> 00:24:45.099 what they need to do to comply. 00:24:45.439 --> 00:24:47.439 And then we actually hold a phone call. 00:24:48.109 --> 00:24:51.819 Uh, with the credit union or the organizing group to walk them through 00:24:51.819 --> 00:24:56.609 it, um, As they are actually looking at the documentation themselves. 00:24:56.709 --> 00:25:00.169 Todd Harper: I really like that high touch, uh, that you do, because 00:25:00.269 --> 00:25:01.979 I think that that's important. 00:25:02.279 --> 00:25:07.729 Is that helping when we do deferrals to get people ultimately through the process? 00:25:07.729 --> 00:25:08.019 Yes, 00:25:08.199 --> 00:25:09.329 Martha Ninichuk: it might take a couple tries. 00:25:09.569 --> 00:25:11.279 Todd Harper: But my ticket, couple of well and and you know, 00:25:11.279 --> 00:25:14.879 I will say this, you know, one lesson that I learned from my dad. 00:25:15.199 --> 00:25:18.619 Um, he was treasurer of that credit union when it got started. 00:25:18.929 --> 00:25:21.299 Uh, and he also took out the first loan. 00:25:21.309 --> 00:25:23.279 Don't ask him to bond internal controls. 00:25:23.619 --> 00:25:24.259 Uh, certainly. 00:25:24.479 --> 00:25:31.789 Uh, but, um, as the, as the, The CEO of the credit union said at the time, we 00:25:31.789 --> 00:25:33.249 can't just make money on investments. 00:25:33.289 --> 00:25:34.569 We have to make money on loans. 00:25:34.619 --> 00:25:35.469 That's what we do. 00:25:35.469 --> 00:25:41.199 And that's why he took that out, the loan for the camper trailer, uh, that, uh, I 00:25:41.199 --> 00:25:43.329 certainly got to benefit from it as a kid. 00:25:43.639 --> 00:25:45.559 Um, one last question. 00:25:45.559 --> 00:25:47.869 I think this is a really important one. 00:25:48.359 --> 00:25:53.939 Um, it's not just that we get new credit unions chartered. 00:25:54.494 --> 00:25:57.934 It's also important to know, how are they performing? 00:25:58.934 --> 00:26:00.414 Are they getting past five years? 00:26:00.454 --> 00:26:02.824 Are they getting, you know, I know the first five years 00:26:02.824 --> 00:26:04.304 we spend careful attention. 00:26:04.444 --> 00:26:05.684 Are they getting past ten years? 00:26:05.684 --> 00:26:07.534 What does the data show there? 00:26:08.534 --> 00:26:09.204 Lalani: I'll take that question. 00:26:09.494 --> 00:26:09.774 Okay, Yolanda. 00:26:09.874 --> 00:26:10.074 Todd Harper: Sure. 00:26:10.264 --> 00:26:14.414 Lalani: So, um, So, the performance right now varies, um, so it's really hard to 00:26:14.414 --> 00:26:22.964 tell, but, um, to date of since 2018, we've had, um, one credit in eMERGE, but 00:26:22.974 --> 00:26:25.134 all the rest of them are in operations. 00:26:25.594 --> 00:26:30.984 And I'm happy to say that, um, We have the, the rest of the remaining 00:26:30.984 --> 00:26:34.644 credit unions have been able to provide products and services 00:26:34.644 --> 00:26:37.424 to approximately 15, 000 people. 00:26:37.974 --> 00:26:39.724 They have a total assets totaling 51. 00:26:39.784 --> 00:26:43.754 9 million, shared deposits of 34. 00:26:43.804 --> 00:26:46.474 8 million, and loans of 15. 00:26:46.524 --> 00:26:47.394 4 million. 00:26:47.839 --> 00:26:51.669 So they are operating and pursuing their, their, their mission. 00:26:51.869 --> 00:26:54.779 Todd Harper: Yeah, and I think we have to be a little careful when 00:26:54.779 --> 00:26:59.099 we say loans, because a couple of those credit unions are indeed 00:26:59.149 --> 00:27:02.339 Islamic credit unions associated. 00:27:02.634 --> 00:27:08.754 Um, with mosques that, uh, and, and it's against, uh, Islamic law to have a 00:27:08.754 --> 00:27:13.674 loan, but they, they have set up a fee structure that, uh, as a substitute, 00:27:13.944 --> 00:27:16.784 um, for, for the interest overall. 00:27:17.254 --> 00:27:20.094 Um, thank you so much for those insights, uh, Leilani. 00:27:20.094 --> 00:27:24.234 In closing, the chartering of a new credit union is often the culmination of years 00:27:24.234 --> 00:27:27.064 of high hopes and hard work by organizers. 00:27:27.434 --> 00:27:30.964 Consistent with the law, we at the NCUA need to facilitate the work. 00:27:31.284 --> 00:27:35.524 That's why the NCOA is making meaningful improvements to its chartering process 00:27:35.524 --> 00:27:39.934 where possible to bring new and more federal credit unions into the system. 00:27:40.254 --> 00:27:44.524 In doing so, we are providing consumers with greater access to safe, fair, 00:27:44.734 --> 00:27:49.144 and affordable financial products and services within the cooperative model. 00:27:49.404 --> 00:27:53.814 One last point that I just would like to make, I thought that, um, together all 00:27:53.814 --> 00:28:00.194 of the work that you and your team did at the MDI symposium, uh, last, um, It 00:28:00.194 --> 00:28:05.034 was earlier this month, uh, the week's flyby, uh, but earlier this week was 00:28:05.044 --> 00:28:10.054 really an important set of work and I hope that we continue, uh, to do that 00:28:10.054 --> 00:28:14.394 because I got a lot of positive feedback from those credit unions that attended, 00:28:14.634 --> 00:28:16.584 many of which were new credit unions. 00:28:16.584 --> 00:28:20.724 In fact, one of our key presenters was a new credit union, uh, himself. 00:28:21.214 --> 00:28:22.244 With that, let me turn it 00:28:22.244 --> 00:28:23.244 Kyle Hauptman: over to the Vice Chairman. 00:28:23.584 --> 00:28:26.974 Speaking of our, uh, good work at our events, I believe our MD, our 00:28:26.984 --> 00:28:30.719 DEI summit was in Minneapolis, That is connected in some manner to 00:28:30.719 --> 00:28:34.624 the fact that We've had two recent ones, quick charters in Minneapolis. 00:28:35.624 --> 00:28:35.774 Martha Ninichuk: Why, 00:28:35.774 --> 00:28:36.484 Kyle Hauptman: why we picked it, 00:28:36.874 --> 00:28:37.124 Martha Ninichuk: I 00:28:37.504 --> 00:28:38.804 Todd Harper: mean, versus Cleveland or someplace. 00:28:39.534 --> 00:28:42.594 I actually think it was we were thinking to try and get out of just 00:28:42.694 --> 00:28:44.484 the state, so that we could get more 00:28:44.484 --> 00:28:46.714 Kyle Hauptman: people and different people to the table. 00:28:46.854 --> 00:28:51.884 It was remarkable that before, you know, uh, I think it's important that 00:28:51.884 --> 00:28:53.834 because a third of the credit unions in this country are state charter. 00:28:54.369 --> 00:28:57.829 We make announcements about we did a charter, but I think it's equally 00:28:57.829 --> 00:29:02.199 important to say we've granted insurance because it's still the birth 00:29:02.239 --> 00:29:07.199 of a new credit union and Often their state has kind of finished theirs 00:29:07.199 --> 00:29:09.479 and their answer is we're all set. 00:29:09.939 --> 00:29:13.409 You just got to get insurance from NCUA So it is still announcing the birth of 00:29:13.409 --> 00:29:19.044 a new Credit union so I think we should make and and the the ways we've tried to 00:29:19.794 --> 00:29:23.724 You know, what gets measured gets done, what gets praised is considered good. 00:29:24.064 --> 00:29:26.614 Uh, we give shout outs to new credit unions, we praise 00:29:26.614 --> 00:29:27.704 our staff for getting going. 00:29:28.104 --> 00:29:31.669 Uh, let me start with this though, um, Any of the new ones you've been around for the 00:29:31.669 --> 00:29:36.849 last, you know, four years at least, um, may I ask, what's the largest amount at 00:29:36.849 --> 00:29:40.589 their birth of deposit, insured deposits? 00:29:41.179 --> 00:29:43.769 What I'm trying to get at is, the new credit units are 00:29:43.769 --> 00:29:45.259 almost always small, right? 00:29:45.889 --> 00:29:49.219 There's no such thing as a charter for a 5 billion credit unit we've had, right? 00:29:49.219 --> 00:29:50.939 You could convert from a bank or something. 00:29:50.940 --> 00:29:53.959 Yeah, what's the, what's the largest risk we've had in any of these 00:29:53.959 --> 00:29:55.299 new ones in the last few years? 00:29:55.309 --> 00:29:56.089 Do you know, ballpark risk? 00:29:56.229 --> 00:29:56.939 I don't, 00:29:57.049 --> 00:29:59.519 Martha Ninichuk: uh, unless Leilani's 20 million would be high probably, right? 00:29:59.519 --> 00:30:01.509 Yes, 20 million would be high. 00:30:01.529 --> 00:30:05.689 I would say probably, and again, I am totally just throwing it 00:30:05.699 --> 00:30:07.839 out there, probably the highest would be around 5 million. 00:30:07.859 --> 00:30:08.109 Yeah. 00:30:08.464 --> 00:30:10.634 Kyle Hauptman: The highest, and I think, you know, is it half 00:30:10.634 --> 00:30:11.404 a million with the minimum, 00:30:11.504 --> 00:30:14.024 Martha Ninichuk: or capital at least, uh, the dollar? 00:30:14.024 --> 00:30:17.074 The capital is really tied upon the risk associated. 00:30:18.054 --> 00:30:21.014 Kyle Hauptman: It would be unusual to have anything below half a million, you know. 00:30:21.324 --> 00:30:22.134 Nowadays. 00:30:22.194 --> 00:30:22.634 Yes. 00:30:22.694 --> 00:30:25.094 Uh, there's a handful out there that have six digits in assets 00:30:25.104 --> 00:30:26.104 that still exist, you know. 00:30:26.114 --> 00:30:31.359 But, what I'm trying to get at is, you know, Is the good thing about this and 00:30:31.369 --> 00:30:35.779 trying new things and we know that they're not all going to succeed, even the best 00:30:35.779 --> 00:30:39.639 franchising companies that they don't all work well, even if they have the best 00:30:39.809 --> 00:30:45.549 processes, but they're usually really small risk financially for us, right? 00:30:45.579 --> 00:30:48.229 So I think, uh, you know, we have to weigh risk. 00:30:48.259 --> 00:30:54.159 We have, uh, all of these credit unions we put together, adding it up are a rounding 00:30:54.159 --> 00:30:56.189 error to some of the results we get. 00:30:56.199 --> 00:30:58.749 You know, uh, we have quarterly fluctuations at some of the 00:30:58.749 --> 00:31:00.079 larger ones that the wharf. 00:31:00.549 --> 00:31:04.109 You know, in capital and in earnings and operating income that dwarf 00:31:04.109 --> 00:31:05.879 the total risk for all of these. 00:31:05.889 --> 00:31:09.549 So, um, that's another benefit is that from a risk standpoint, 00:31:09.549 --> 00:31:10.619 they're usually very small. 00:31:10.999 --> 00:31:13.729 And if they're growing irresponsibly, we have mechanisms to tap the 00:31:13.729 --> 00:31:15.069 brakes, which we have done before. 00:31:15.669 --> 00:31:19.899 Um, uh, here's my prepared remarks. 00:31:19.949 --> 00:31:22.259 Uh, you presented, uh, June of last year. 00:31:22.359 --> 00:31:25.149 Uh, I would encourage future boards who obviously can do 00:31:25.149 --> 00:31:26.329 what they want to keep this. 00:31:26.739 --> 00:31:31.359 Uh, I will take credit or blame for trying to create this a annual. 00:31:31.729 --> 00:31:32.049 thing. 00:31:32.059 --> 00:31:35.009 But at least for me, this is way more interesting than 00:31:35.049 --> 00:31:35.969 some of the briefings we have. 00:31:35.969 --> 00:31:39.909 I'll tell you that, uh, that briefing last year was focused 00:31:39.909 --> 00:31:41.719 on new charter modernization. 00:31:41.719 --> 00:31:46.779 So I appreciate this year, um, putting the FOM, uh, information in there 00:31:46.779 --> 00:31:49.689 where, uh, this has been a priority to me since my first board meeting. 00:31:49.689 --> 00:31:51.379 I actually mentioned it before that when I went through the 00:31:51.379 --> 00:31:52.599 settle confirmation process. 00:31:52.599 --> 00:31:53.809 To me, it's an inclusion issue. 00:31:54.239 --> 00:31:58.449 If we're making it any hard, For any group of Americans to decide to have their 00:31:58.449 --> 00:32:02.359 own financial service provider, we are only paying lip service to all the words 00:32:02.369 --> 00:32:04.629 like financial inclusion and everything. 00:32:05.159 --> 00:32:08.109 Um, and for over 90 years, forming a credit union has been the 00:32:08.109 --> 00:32:09.169 answer to financial inclusion. 00:32:09.179 --> 00:32:11.209 Hundreds of thousands of immigrants, religious groups, 00:32:11.219 --> 00:32:12.279 factory workers, and more. 00:32:12.509 --> 00:32:15.399 Americans should decide how many financial services provider we have. 00:32:15.489 --> 00:32:18.509 Every single one of the charters ever granted, it was somebody out there 00:32:18.699 --> 00:32:23.099 who wasn't totally satisfied with the existing financial services marketplace. 00:32:23.099 --> 00:32:24.014 Why would you start your own? 00:32:24.934 --> 00:32:29.074 Uh, so, you know, 1934, uh, the Federal Credit Union Act was signed 00:32:29.074 --> 00:32:34.384 by President Roosevelt and it put the credit union division inside the 00:32:34.384 --> 00:32:36.714 foreign credit administration, okay? 00:32:37.194 --> 00:32:39.434 NCAA itself didn't exist until 1970. 00:32:40.434 --> 00:32:44.554 So, there was no federal charter until 1934. 00:32:44.594 --> 00:32:46.464 By that point, there were almost 3, 000 credit unions. 00:32:46.574 --> 00:32:50.114 So, the first 3, 000 that were created in America had no interaction with 00:32:50.114 --> 00:32:53.274 anybody in our nation's capital because they were state chartered. 00:32:53.869 --> 00:32:56.089 And federal deposit insurance didn't exist. 00:32:56.789 --> 00:33:00.939 So right or wrong, that process was, I'm going to say, probably 00:33:00.939 --> 00:33:02.919 easier, uh, and quicker. 00:33:02.919 --> 00:33:05.449 So those people had an advantage for getting there early. 00:33:05.549 --> 00:33:09.059 Okay, three, the first 3, 000 never touched anyone in Washington, chartered 00:33:09.059 --> 00:33:10.319 by the state, insured elsewhere. 00:33:11.319 --> 00:33:14.709 Things were a lot simpler in a lot of ways in 1934 than they are today. 00:33:14.729 --> 00:33:17.319 Getting into a completed charter application could take years. 00:33:17.839 --> 00:33:20.139 Um, the complexity of financial services has changed. 00:33:20.179 --> 00:33:23.509 What hasn't changed is the importance of financial services to people 00:33:23.509 --> 00:33:26.359 of modest means and to having one that serves your community, 00:33:26.389 --> 00:33:27.629 however you want to define that. 00:33:28.629 --> 00:33:30.569 Last year, we had the chart. 00:33:31.079 --> 00:33:32.279 I'm holding up what you put last year. 00:33:33.279 --> 00:33:36.719 And charters per year, you have that one this year too. 00:33:36.809 --> 00:33:41.909 And then this one was from receipt of a complete application to getting a 00:33:41.909 --> 00:33:43.279 charter of those that got a charter. 00:33:43.479 --> 00:33:45.509 Very useful thing to track. 00:33:46.029 --> 00:33:49.399 The one thing I remember looking at is we've noticed there's a lot of 00:33:49.399 --> 00:33:51.589 roadblocks to getting to complete. 00:33:52.129 --> 00:33:52.449 Right? 00:33:52.449 --> 00:33:55.859 Where at that point you would not be in any part of this graph 00:33:55.859 --> 00:33:59.269 because you are, you are not a, uh, you have not fully applied. 00:34:00.059 --> 00:34:01.259 And that we're tracking now. 00:34:01.309 --> 00:34:01.559 Right? 00:34:01.589 --> 00:34:02.339 And you put that up. 00:34:02.339 --> 00:34:02.389 Right? 00:34:03.019 --> 00:34:07.279 Um, and I know it can be acknowledged to pin down the exact start date sometimes, 00:34:07.279 --> 00:34:10.319 and you had to pick one, uh, I know for a fact there are groups who've 00:34:10.319 --> 00:34:13.829 talked to us, had meetings, including with then chairman Hood, but they don't 00:34:13.829 --> 00:34:15.389 consider themselves to have applied. 00:34:15.389 --> 00:34:17.149 They were window shopping, just talking about it. 00:34:17.459 --> 00:34:21.969 Maybe we could track that somewhere, just indications of interest, but, um, but, 00:34:21.969 --> 00:34:23.209 um, it's good to be able to have them. 00:34:23.639 --> 00:34:26.169 Uh, date when it starts, because getting to complete application, 00:34:26.569 --> 00:34:28.099 uh, has been a roadblock. 00:34:28.149 --> 00:34:32.319 People have walked away, uh, that would never, ever have appeared in 00:34:32.319 --> 00:34:36.429 this anywhere, because, uh, uh, nor would they be, have ever been rejected. 00:34:36.749 --> 00:34:38.379 Uh, their, their charter was denied, because they never 00:34:38.379 --> 00:34:39.499 got to a complete application. 00:34:39.999 --> 00:34:43.829 Uh, much like applying to college, you can be there, you can't be admitted or denied. 00:34:44.499 --> 00:34:46.909 Until you have a completed application, you know, test scores, 00:34:46.909 --> 00:34:48.149 you got to get your transcript sent. 00:34:48.659 --> 00:34:51.699 Uh, and colleges have a lot of incentives to have a lot of applications. 00:34:51.709 --> 00:34:56.209 So, if a lot of people were getting stuck in that part, where they never fully 00:34:56.209 --> 00:35:02.829 applied, uh, they have, uh, they'll take actions to make that process, uh, easier. 00:35:02.859 --> 00:35:04.259 To make sure you get, to make it clear. 00:35:04.289 --> 00:35:05.129 Here's what you have to do. 00:35:05.199 --> 00:35:06.189 Let's make it easy to do it. 00:35:06.779 --> 00:35:10.939 Um, and so the people get stuck in it. 00:35:10.939 --> 00:35:14.494 If my college was having a lot of problems versus others, There's 00:35:14.494 --> 00:35:15.334 something wrong here, right? 00:35:15.384 --> 00:35:17.174 Because those people are not in our admissions rate at all. 00:35:17.204 --> 00:35:18.514 They're neither approved nor denied. 00:35:18.984 --> 00:35:20.634 Um, I won't belabor the point. 00:35:20.654 --> 00:35:23.634 There was a group that had an unusual, uh, application. 00:35:23.654 --> 00:35:25.714 Interesting, I thought, they were trying to do something different. 00:35:26.144 --> 00:35:29.524 And I agreed with the decision, I, um, that to deny them 00:35:29.534 --> 00:35:30.494 the charter at that time. 00:35:30.534 --> 00:35:31.204 I agree with that. 00:35:31.204 --> 00:35:31.874 That was another reason. 00:35:32.089 --> 00:35:36.529 But a big part of the answer that they got, um, was they didn't have any 00:35:36.529 --> 00:35:38.449 lending income in their initial phase. 00:35:38.459 --> 00:35:42.139 They could have added it, and they had many conversations with CURE. 00:35:42.139 --> 00:35:43.319 I have the documentation. 00:35:43.319 --> 00:35:44.479 They had face to face meetings. 00:35:44.479 --> 00:35:47.669 They gave the, uh, business plan, which I also have, and the dates 00:35:47.679 --> 00:35:48.659 that all these things were sent. 00:35:49.329 --> 00:35:53.879 And they, uh, When they got denied for the charter later, it was kicked back to them. 00:35:53.979 --> 00:35:56.789 They couldn't believe no one ever told them you have to have lending. 00:35:56.839 --> 00:35:58.969 I know most groups do, so you don't have to mention it. 00:35:59.589 --> 00:36:03.369 But they couldn't, imagine you're opening up your college envelopes. 00:36:03.399 --> 00:36:04.209 You know, am I going to get in? 00:36:04.209 --> 00:36:04.899 Am I going to get in? 00:36:05.149 --> 00:36:07.809 Imagine you spoke to the admissions director multiple times. 00:36:07.859 --> 00:36:11.749 Imagine you didn't think that you had to have your test scores sent. 00:36:11.949 --> 00:36:13.829 You didn't think you personally had to take action. 00:36:13.849 --> 00:36:16.399 Maybe you thought the college got it automatically, right? 00:36:16.619 --> 00:36:17.169 You could be wrong. 00:36:18.169 --> 00:36:20.889 But imagine you said that multiple times to the admissions office, right? 00:36:20.929 --> 00:36:23.209 In writing, I think I've done everything I have. 00:36:23.509 --> 00:36:25.769 I don't need to take action for you to get my test scores. 00:36:25.819 --> 00:36:27.059 And then it finally came around. 00:36:27.809 --> 00:36:28.419 Did I get admitted? 00:36:28.429 --> 00:36:28.899 Did I get in? 00:36:28.909 --> 00:36:29.589 Did I get waitlisted? 00:36:29.669 --> 00:36:30.399 No, none of those. 00:36:30.399 --> 00:36:31.489 You never had a complete application. 00:36:31.489 --> 00:36:31.719 Why? 00:36:31.769 --> 00:36:32.459 Because you didn't finish your S course. 00:36:32.479 --> 00:36:34.729 I literally told you ten times that I didn't think. 00:36:35.209 --> 00:36:39.949 So that was, could they have been told, even though it was an unusual case, uh, 00:36:39.959 --> 00:36:43.999 and most people have lending income, you, in your initial app, in your 00:36:43.999 --> 00:36:46.509 application, you have to have lending. 00:36:46.519 --> 00:36:47.609 Could they have been told that? 00:36:47.769 --> 00:36:50.229 Like, is there a universe in which someone has said, we look at your 00:36:50.279 --> 00:36:52.449 business plan, you know you have to have lending income, right? 00:36:52.449 --> 00:36:54.919 National Credit Union Act, our interpretation, your interpretation, 00:36:54.919 --> 00:36:55.839 which I consider correct. 00:36:55.989 --> 00:36:56.459 Yes. 00:36:56.599 --> 00:36:58.219 Uh, mentions credits. 00:36:58.219 --> 00:36:59.809 There's got to be something in there with credit. 00:37:00.339 --> 00:37:02.069 They were never told that and they couldn't believe it. 00:37:02.349 --> 00:37:07.319 Uh, months later, they got rejected and one of the reasons was you'd have lending. 00:37:07.389 --> 00:37:08.309 We could have easily added that. 00:37:08.309 --> 00:37:09.299 Why didn't anybody tell us? 00:37:09.349 --> 00:37:10.539 We told them many times. 00:37:11.509 --> 00:37:12.469 Could they have been told that? 00:37:13.469 --> 00:37:17.049 Martha Ninichuk: Yes, I find it hard to believe they were not told that. 00:37:17.829 --> 00:37:18.769 Kyle Hauptman: They were absolutely stunned. 00:37:19.769 --> 00:37:23.339 Um, and No one could find any documentation that they were. 00:37:23.709 --> 00:37:26.029 As a matter of fact, I have documentation the other way around. 00:37:27.029 --> 00:37:28.059 It's not in their business plan. 00:37:28.059 --> 00:37:29.109 It's not in their performance. 00:37:30.109 --> 00:37:33.259 And you know, I understand that that's what the credit union act says. 00:37:33.259 --> 00:37:36.629 But anyway, they find out it was not in the documentation I have. 00:37:36.924 --> 00:37:39.154 As they said, here's what we know, here's what we're planning on doing. 00:37:39.664 --> 00:37:44.004 Um, anyway, I'm glad we tracked the time it takes for a group to formally identify 00:37:44.004 --> 00:37:46.784 their field of membership until they successfully complete their application. 00:37:46.784 --> 00:37:49.834 That is a separate measure that I think is very interesting. 00:37:50.304 --> 00:37:53.234 Um, and let me ask you about the provisional charter. 00:37:53.234 --> 00:37:58.914 So I, uh, I'm proud myself and my advisor behind me, Sarah Bang, 00:37:58.924 --> 00:38:00.394 that that was kind of our idea. 00:38:00.544 --> 00:38:01.824 But it is just an idea. 00:38:01.844 --> 00:38:04.534 I, we don't know if it's, you know, Uh, Eureka. 00:38:04.914 --> 00:38:05.244 Right? 00:38:05.244 --> 00:38:08.404 Because we can't get CDFI funds, we can't even apply until we're an institution. 00:38:08.694 --> 00:38:11.424 So I think we all agree on the problem, but this is why we 00:38:11.424 --> 00:38:13.544 have, you know, beta testing. 00:38:13.914 --> 00:38:15.914 How is it, I mean, was it a good idea? 00:38:15.914 --> 00:38:16.654 Is it working? 00:38:16.674 --> 00:38:17.514 Should we change it? 00:38:17.524 --> 00:38:18.964 Do we not have the right groups yet? 00:38:18.964 --> 00:38:19.334 Or what? 00:38:19.344 --> 00:38:20.224 Yeah, I'll take that, 00:38:20.294 --> 00:38:21.004 Martha Ninichuk: uh, question. 00:38:21.014 --> 00:38:21.384 Thank you. 00:38:21.414 --> 00:38:25.224 I, I think, uh, As with any pilot, you're going to find great 00:38:25.224 --> 00:38:29.324 things and you're going to find things that don't work so well. 00:38:29.944 --> 00:38:35.944 Um, I think with the organizing groups, it's still a big change for 00:38:35.944 --> 00:38:40.444 them from when they're working through the application and now they're open. 00:38:40.904 --> 00:38:42.524 And that's when the real work starts. 00:38:42.524 --> 00:38:44.714 We hear that all the time from the organizing groups. 00:38:44.724 --> 00:38:46.774 Wow, we've shifted from CURE to the field. 00:38:47.559 --> 00:38:50.509 And there's a lot of things we need to comply with, there's a lot of 00:38:50.509 --> 00:38:54.229 things we need to do in order to get that, those credit union doors open, 00:38:54.739 --> 00:38:57.119 um, besides finding the capital. 00:38:57.489 --> 00:39:02.719 So it's a matter of education, um, the organizing groups, getting the right 00:39:02.719 --> 00:39:09.029 people in the positions, and getting them trained up besides, um, So that's 00:39:09.029 --> 00:39:13.189 why they have 12 months, um, during this period to do all of that work. 00:39:13.589 --> 00:39:17.719 And then at the end, we'll see if, number one, they obtain the capital 00:39:17.719 --> 00:39:21.929 that they signed for within their letter of understanding agreement 00:39:21.929 --> 00:39:26.259 saying, we commit to, uh, obtaining this amount of donated capital. 00:39:26.659 --> 00:39:30.559 Um, and then the field makes the determination of, um, You know, are 00:39:30.559 --> 00:39:31.929 you ready to open up your doors? 00:39:32.479 --> 00:39:36.789 And then we'll make an analysis at that point on how successful the pilot was. 00:39:36.869 --> 00:39:38.489 Kyle Hauptman: Gosh, I know we capped it at a certain number 00:39:38.489 --> 00:39:39.859 of these because it was a pilot. 00:39:39.889 --> 00:39:40.269 Martha Ninichuk: We did. 00:39:40.339 --> 00:39:40.619 Kyle Hauptman: Yeah. 00:39:40.659 --> 00:39:40.929 We did. 00:39:41.069 --> 00:39:41.459 Okay, I know people do that. 00:39:41.909 --> 00:39:46.339 And just the basic, the idea that we thought was good, chicken and egg 00:39:46.339 --> 00:39:47.719 problem, has that actually been solved? 00:39:47.729 --> 00:39:50.519 Meaning when people say, I can get the money. 00:39:51.054 --> 00:39:54.704 I just need a charter, like, have those checks come in right away, 00:39:54.704 --> 00:39:55.694 like, did that actually work? 00:39:55.804 --> 00:39:57.204 Martha Ninichuk: That hasn't yet happened. 00:39:57.204 --> 00:39:57.874 We're not at that point yet. 00:39:57.914 --> 00:39:58.154 Kyle Hauptman: We're not 00:39:58.154 --> 00:39:58.724 Martha Ninichuk: at that point yet. 00:39:58.904 --> 00:39:59.224 This 00:40:00.224 --> 00:40:01.054 Kyle Hauptman: doesn't work unless that's actually 00:40:01.554 --> 00:40:01.644 Martha Ninichuk: true. 00:40:01.674 --> 00:40:07.404 Yeah, it's still difficult for the organizing group to find the money. 00:40:07.594 --> 00:40:08.954 Kyle Hauptman: Don't just believe, you know, we'll get the money. 00:40:08.964 --> 00:40:14.054 Have someone say, I'm a grant giving operation or I'm Treasury's fund, I 00:40:14.054 --> 00:40:16.374 will write a check the day I get this. 00:40:16.404 --> 00:40:19.444 You know, you can, are you talking to the check writers? 00:40:19.954 --> 00:40:22.124 To verify that yes, these people actually will get the money. 00:40:22.124 --> 00:40:22.944 There is a chicken and eggs issue. 00:40:22.944 --> 00:40:24.024 Oh, we always 00:40:24.074 --> 00:40:24.694 Martha Ninichuk: verify. 00:40:24.694 --> 00:40:25.094 Okay. 00:40:25.144 --> 00:40:25.894 And they don't have any 00:40:25.894 --> 00:40:27.894 Kyle Hauptman: obligation from our standpoint to do it. 00:40:27.894 --> 00:40:30.254 But they say, yes, it is my plan. 00:40:30.304 --> 00:40:35.424 If the Martha Credit Union gets a charter that, uh, they get the charter on Monday, 00:40:35.424 --> 00:40:36.424 I'll give them a check on Tuesday. 00:40:36.584 --> 00:40:36.794 Right. 00:40:36.794 --> 00:40:37.454 I mean, that's what they say. 00:40:37.514 --> 00:40:37.754 Yeah. 00:40:37.904 --> 00:40:40.514 We, well, we haven't gotten to that point to see if it actually worked. 00:40:40.834 --> 00:40:41.324 Correct. 00:40:41.424 --> 00:40:41.854 Okay. 00:40:42.074 --> 00:40:44.664 And those other groups, the check writers, they, they're not going 00:40:44.664 --> 00:40:48.114 to stand around forever, so it's an incentive for everybody to get this done. 00:40:48.544 --> 00:40:50.449 Um, I'll stop there. 00:40:50.459 --> 00:40:54.679 Um, a lot of credit, I mentioned immigrants, uh, a lot of, there's 00:40:54.679 --> 00:40:57.639 actually, and you mentioned the Islamic, uh, finance, I remember, uh, 00:40:57.679 --> 00:40:59.259 learning Sukuk, you know what that is? 00:40:59.449 --> 00:41:02.289 That is an, uh, Islamic bonds, like we trade treasuries, government 00:41:02.299 --> 00:41:04.869 bonds in this country, that's mostly out of Dubai, a little bit 00:41:04.869 --> 00:41:07.509 in Singapore, there's that whole fascinating world of Islamic finance. 00:41:07.769 --> 00:41:10.949 Governments have to raise money, and people raise money, It's 00:41:10.959 --> 00:41:13.289 kind of like that, but anyway, it's a whole fascinating field. 00:41:13.329 --> 00:41:17.739 But this is why it's terrific that this country still has over 8, 000 depository 00:41:17.739 --> 00:41:18.949 institutions, banks and credit units. 00:41:19.409 --> 00:41:20.799 A lot of countries in the world. 00:41:20.909 --> 00:41:24.819 Imagine all we have was city Wells, B of A Wells Fargo, 4 trillion banks, right? 00:41:25.229 --> 00:41:25.719 Probably work. 00:41:25.719 --> 00:41:26.049 All right. 00:41:26.049 --> 00:41:26.579 If you had. 00:41:26.924 --> 00:41:30.074 Solid job, direct deposit, spoke English, was an American citizen, 00:41:30.084 --> 00:41:33.574 had a social security number, uh, They probably do okay, and that's 00:41:33.574 --> 00:41:34.344 what a lot of countries are. 00:41:34.414 --> 00:41:36.394 I live in Australia, they have four banks, and the government 00:41:36.394 --> 00:41:38.494 won't let any of them merge because they need to be down to three. 00:41:38.834 --> 00:41:40.984 Over 98 percent of Canadians are one of six banks, right? 00:41:40.994 --> 00:41:41.634 That's how it is. 00:41:41.644 --> 00:41:45.854 The fact that we have, um, we have ones that know the corn crop, 00:41:46.144 --> 00:41:49.464 like they know the depreciation schedules by, you know, they're all 00:41:49.464 --> 00:41:50.584 over this country, there's that. 00:41:50.584 --> 00:41:53.064 The ones that answer the phone in Haitian Creole in Florida, I 00:41:53.074 --> 00:41:54.344 assure you Citigroup will do that. 00:41:54.864 --> 00:41:57.859 But, and we want When I, when I mention, we talk about true financial 00:41:57.859 --> 00:42:00.969 inclusion, is letting any of these people have their own, okay? 00:42:01.579 --> 00:42:05.309 Um, and when you look at the ones that are, what we call ethnic credit unions, 00:42:05.319 --> 00:42:08.719 some of them are explicitly ethnic, like the ten Ukrainian American credit unions. 00:42:09.089 --> 00:42:12.319 But a lot of others are de facto an ethnic group. 00:42:12.319 --> 00:42:15.919 I mean, because maybe a, a place of worship, the very first one in 00:42:15.919 --> 00:42:17.069 America was an immigrant group. 00:42:17.099 --> 00:42:20.419 French Canadians, now it's a, it's not an ethnic French Canadian credit 00:42:20.419 --> 00:42:22.769 union, it's a church credit union, it's a French Catholic church. 00:42:22.799 --> 00:42:22.909 It's a church. 00:42:23.349 --> 00:42:23.899 But it is a fact. 00:42:23.929 --> 00:42:26.159 Knights of Columbus is not technically an ethnic credit union, 00:42:26.159 --> 00:42:27.249 but it was Italian American men. 00:42:27.889 --> 00:42:29.959 Uh, the one last year, Alpha Kappa Alpha, right? 00:42:29.959 --> 00:42:33.039 That's not technically a thing, but it's an African American sorority, 00:42:33.039 --> 00:42:34.629 one of the divine nine, right? 00:42:35.029 --> 00:42:39.479 Historically, uh, HBCUs, so it's essentially a, uh, African American women 00:42:40.114 --> 00:42:44.694 Even though by, um, the way it applies is just this fraternal organization, right? 00:42:44.964 --> 00:42:48.064 Uh, uh, Vice President Harris is a, uh, AK member. 00:42:48.064 --> 00:42:51.294 I don't know if she joined the credit union, but, uh, she's an AK from Howard. 00:42:51.484 --> 00:42:56.794 Um, and what, what I care about is the groups now should 00:42:56.804 --> 00:42:57.974 have the same opportunity. 00:42:58.004 --> 00:43:02.474 You can't not notice that most of the ethnic credit unions or quasi 00:43:02.704 --> 00:43:05.764 ethnic like Knights of Columbus, I don't know, it's from the earlier 00:43:05.764 --> 00:43:07.864 period of American immigration, right? 00:43:07.924 --> 00:43:09.484 Uh, Central Europe, Southern Europe. 00:43:10.364 --> 00:43:14.534 And post 1965, when this country kind of opened back up again, is 00:43:14.534 --> 00:43:16.094 primarily Asia and Latin America. 00:43:16.104 --> 00:43:20.204 Those people should have just as much chance as the Italians and 00:43:20.204 --> 00:43:22.814 Slavics and Poles did, uh, before. 00:43:22.824 --> 00:43:28.144 One of the benefits, um, so out of the last decade, uh, from the countries 00:43:28.144 --> 00:43:31.294 from Mexico, India, China, Venezuela, Honduras, Guatemala at the top, 00:43:31.314 --> 00:43:35.404 and then the last couple years, uh, separate, Operation Allies Welcome was 00:43:35.404 --> 00:43:37.164 Afghanistan from the war, from there. 00:43:37.629 --> 00:43:40.279 And Operation Uniting Ukraine, Ukrainians. 00:43:41.279 --> 00:43:44.849 One of those two, of Afghanistan and Ukraine, has the advantage of other 00:43:44.849 --> 00:43:47.699 people from that country came when it was easier to start a credit union, so 00:43:47.699 --> 00:43:49.229 they're Ukrainian American credit unions. 00:43:49.319 --> 00:43:51.669 These people, they can work under that refugee program. 00:43:52.669 --> 00:43:56.079 From what I've been told and what I've seen, they're showing up often with very 00:43:56.079 --> 00:43:58.739 little English ability, second or third language, you have to rush in Ukrainian. 00:43:59.579 --> 00:44:02.049 Credit invisible, no FICO, unemployed. 00:44:02.539 --> 00:44:05.089 If they had a job in Ukraine, they quit it to come here. 00:44:06.054 --> 00:44:11.354 And guess who's giving them a share account and unsecured credit cards, 00:44:12.174 --> 00:44:15.314 unsecured, because it's hard to operate in this life sometimes without a credit card. 00:44:15.594 --> 00:44:18.284 These people, and they're doing what generations of immigrants have done. 00:44:18.314 --> 00:44:19.074 They are hustling. 00:44:19.084 --> 00:44:21.514 They're doing what they can, you know, driving Uber eats 70 00:44:21.514 --> 00:44:25.334 hours a week and their default rates, unsecured credit cards. 00:44:25.344 --> 00:44:25.934 Think about this. 00:44:26.604 --> 00:44:28.244 Can't necessarily fill out the application in English. 00:44:28.245 --> 00:44:32.614 Literally no FICO history whatsoever, credit invisible and unemployed 00:44:33.454 --> 00:44:35.754 and their default rates are lower than the industry average for 00:44:35.754 --> 00:44:36.674 both credit and unsecured credit. 00:44:36.694 --> 00:44:37.124 Why? 00:44:37.124 --> 00:44:37.154 Okay. 00:44:37.694 --> 00:44:40.404 Well, because this is what credit unions do when they're done well. 00:44:40.474 --> 00:44:41.174 An affinity group. 00:44:41.184 --> 00:44:43.954 They know if they don't pay, first of all, it's going to be another Ukrainian 00:44:43.954 --> 00:44:44.894 that's going to come out of their pocket. 00:44:45.629 --> 00:44:49.209 And secondly, if you default on this credit card, I assure you, no one 00:44:49.209 --> 00:44:50.649 is ever going to give you one again. 00:44:50.679 --> 00:44:51.329 You're a long way. 00:44:51.739 --> 00:44:54.489 Uh, feel free to walk into any of the big banks and they serve a purpose and 00:44:54.489 --> 00:44:56.619 say, hi, uh, uh, don't speak English. 00:44:56.659 --> 00:44:57.619 I don't have a job. 00:44:57.649 --> 00:44:58.569 I have zero credit history. 00:44:58.959 --> 00:45:00.129 Can I have an unsecured credit card? 00:45:00.149 --> 00:45:01.139 No way. 00:45:01.719 --> 00:45:02.709 Um, and it's terrific. 00:45:02.709 --> 00:45:06.709 And I just think that the, you know, that the Venezuelans, Hondurans, 00:45:06.789 --> 00:45:10.629 uh, Pakistanis better deserve the same chance to have that as opposed 00:45:10.629 --> 00:45:12.079 to Slovaks, Italians, et cetera. 00:45:12.089 --> 00:45:13.189 Um, that's just my. 00:45:14.189 --> 00:45:18.069 view as to why I keep, why I keep at this, okay? 00:45:18.269 --> 00:45:19.409 A couple questions. 00:45:20.409 --> 00:45:25.909 So last year we had useful days of complete application 00:45:25.939 --> 00:45:27.419 to charter if it was granted. 00:45:28.009 --> 00:45:32.769 Um, that other number, last couple years, do you have an average length 00:45:32.769 --> 00:45:36.639 of time it took from when they kind of step one, they at least identify their 00:45:36.639 --> 00:45:41.509 field of membership, it's legit, from that to the completed application? 00:45:42.309 --> 00:45:42.619 Martha Ninichuk: Yes. 00:45:42.639 --> 00:45:45.569 So I just want to, um, I just threw a lot at you. 00:45:45.949 --> 00:45:46.279 No, no. 00:45:46.309 --> 00:45:46.739 That's all right. 00:45:47.049 --> 00:45:47.889 I just want to restate. 00:45:47.909 --> 00:45:52.719 Phase one is when the organizing group, uh, submits their paperwork to get 00:45:52.719 --> 00:45:54.849 their field of membership approved. 00:45:55.699 --> 00:45:59.019 And once their field of membership is approved and the type of charter, of 00:45:59.019 --> 00:46:03.839 course, that they're going to apply for, we invite them to start phase two. 00:46:03.859 --> 00:46:06.499 Phase two is the meat of the application. 00:46:06.639 --> 00:46:10.119 So that's business plan, marketing plan, performance statement, okay? 00:46:10.269 --> 00:46:10.919 And, and. 00:46:11.289 --> 00:46:12.859 Uh, identification of capital. 00:46:13.859 --> 00:46:14.549 That's phase two. 00:46:14.579 --> 00:46:17.439 Phase three, it's basically wrapping it up, right? 00:46:17.469 --> 00:46:20.889 We've got to get the regular NCUA forms filled out. 00:46:20.899 --> 00:46:24.669 We complete the letter of understanding and agreement with the field staff. 00:46:24.759 --> 00:46:27.699 Um, and then the charter issuance. 00:46:28.099 --> 00:46:33.694 So, from phase one completion, when we've approved the field of membership, Um, and 00:46:33.694 --> 00:46:40.334 I took those three, um, institutions that were chartered in both 2024 and then 2023. 00:46:40.714 --> 00:46:44.754 So from phase one completion until they submitted the completed application, 00:46:45.044 --> 00:46:46.184 the average number of days was 860. 00:46:47.184 --> 00:46:48.134 Kyle Hauptman: Okay, and 00:46:48.264 --> 00:46:56.454 Martha Ninichuk: And then 2023, from phase one completion until completed, I'm sorry, 00:46:56.524 --> 00:47:01.354 phase one completion until they submitted a completed application, 860 days. 00:47:01.814 --> 00:47:05.294 And then in 2023, 627. 00:47:06.154 --> 00:47:11.734 And then the second set of numbers averaged from phase one application 00:47:12.284 --> 00:47:16.714 to charter approval was 1, 187. 00:47:17.439 --> 00:47:18.029 days. 00:47:19.029 --> 00:47:20.429 But let me break it down further. 00:47:20.609 --> 00:47:22.479 187 days total. 00:47:23.249 --> 00:47:32.039 Organizing group, out of that 1, 187, they had the paperwork for 873 days. 00:47:32.829 --> 00:47:37.419 And then when they submitted it and we did our analysis, we had it for 314 days. 00:47:37.429 --> 00:47:38.939 So that one, the one number that stands 00:47:38.939 --> 00:47:40.369 Kyle Hauptman: out there is 800 something. 00:47:40.419 --> 00:47:41.539 That's over two years. 00:47:41.859 --> 00:47:44.209 That's to get to a completed application. 00:47:44.629 --> 00:47:48.539 Martha Ninichuk: That is from phase one to a completed application submission. 00:47:48.589 --> 00:47:50.869 Kyle Hauptman: So for over two years, there's a group that feels, and 00:47:50.869 --> 00:47:55.519 we feel, they are actively want to start a credit year, but they're not 00:47:55.529 --> 00:47:56.709 at the completed application phase. 00:47:56.739 --> 00:47:57.149 Okay. 00:47:57.189 --> 00:47:57.459 Martha Ninichuk: Right. 00:47:57.459 --> 00:48:01.419 So what can happen is phase one, we approve them, and it might take 00:48:01.419 --> 00:48:04.759 them six months to get back with us to even submit an application. 00:48:04.759 --> 00:48:10.259 So it's the data we can track, but the nuances is hard to 00:48:10.259 --> 00:48:11.749 be reflected in the numbers. 00:48:12.079 --> 00:48:12.159 Kyle Hauptman: Yeah? 00:48:12.229 --> 00:48:12.439 Yeah. 00:48:12.479 --> 00:48:14.689 Um, especially when Yeah. 00:48:15.029 --> 00:48:15.999 This is what averages are for. 00:48:16.009 --> 00:48:21.189 I, I'm going to suggest that we, so the FDIC puts the name and they do it 00:48:21.199 --> 00:48:22.759 once they have a completed application. 00:48:22.759 --> 00:48:23.029 Okay. 00:48:23.029 --> 00:48:23.859 They put the name of them. 00:48:23.879 --> 00:48:25.639 You can get all their averages and means. 00:48:25.649 --> 00:48:27.669 I mean, if you want to, you can just export the Excel and you 00:48:27.669 --> 00:48:29.389 can sort by all these things. 00:48:29.929 --> 00:48:31.719 I would suggest, uh, Mr. 00:48:31.719 --> 00:48:35.419 Chairman, I wouldn't mind if we put averages and this sort of 00:48:35.419 --> 00:48:37.459 stuff up in the de novo area. 00:48:38.184 --> 00:48:42.184 Maybe we can put high and low or something like that, because obviously averages 00:48:42.194 --> 00:48:44.524 can be thrown off by a weird situation. 00:48:44.984 --> 00:48:47.204 Um, but I think it might be useful information. 00:48:47.214 --> 00:48:50.124 Because a lot of people, the one thing I hear over and over, we 00:48:50.124 --> 00:48:51.474 don't really know where we are. 00:48:51.514 --> 00:48:52.674 Like, is this? 00:48:53.004 --> 00:48:55.434 We know it's not going to be, we're not going to open our doors tomorrow morning, 00:48:55.924 --> 00:48:59.744 but 10 years would be really bizarre, and none of our partners would stay with us. 00:48:59.934 --> 00:49:01.064 Five years is really long. 00:49:01.074 --> 00:49:03.904 They want some kind of handle, and the easiest thing to do, 00:49:03.914 --> 00:49:06.964 without passing judgment on their application, is just say, actual 00:49:06.974 --> 00:49:08.124 data of what's happened, right? 00:49:08.414 --> 00:49:10.034 Some of them are complex, some of them are not. 00:49:10.074 --> 00:49:14.474 Um, anyway, I think that the maybe averages and, Uh, that sort of 00:49:14.474 --> 00:49:15.484 data, I think, might be useful. 00:49:15.684 --> 00:49:19.154 Todd Harper: I thought that there were some plans already underway 00:49:19.194 --> 00:49:22.454 to achieve that, uh, uh, So, 00:49:22.484 --> 00:49:27.154 Martha Ninichuk: um, yes, the, the, we are developing the requirements for a 00:49:27.154 --> 00:49:34.299 new charter system, which would take the application, uh, Um, Part of the 00:49:34.489 --> 00:49:40.009 software program would have a status tracker where the organizing group, not 00:49:40.009 --> 00:49:43.309 the public, but the organizing group could go in and see where they're at. 00:49:43.309 --> 00:49:46.729 So, first phase passed, second phase in progress. 00:49:47.709 --> 00:49:49.139 You know, they can check along the way. 00:49:49.639 --> 00:49:55.269 Third by is chartered, um, so they will have that within the app, actual 00:49:55.269 --> 00:49:57.089 application if, if that's developed. 00:49:58.089 --> 00:50:01.269 Kyle Hauptman: And, um, one of the, uh, annoying things to start 00:50:01.279 --> 00:50:04.159 anew is you got to have bylaws and policies, you know, started. 00:50:04.199 --> 00:50:07.089 AI kind of helps with this, actually, but that's something that takes a lot of time. 00:50:07.089 --> 00:50:09.559 Do we have, we were talking about sample templates, you know, 00:50:09.559 --> 00:50:10.839 that, for various creations. 00:50:10.849 --> 00:50:12.499 Do we have those, are those provided to groups? 00:50:12.509 --> 00:50:13.299 Where can they find those? 00:50:13.359 --> 00:50:15.789 Martha Ninichuk: Absolutely, on our website under new charters. 00:50:15.989 --> 00:50:18.359 Kyle Hauptman: Yeah, so some of that paperwork, oh, we have to create 00:50:18.359 --> 00:50:19.459 all these bylaws, what do we do? 00:50:19.460 --> 00:50:19.524 Okay. 00:50:19.524 --> 00:50:22.044 You know, it might not be as hard as you think, 00:50:22.074 --> 00:50:22.554 Martha Ninichuk: and 00:50:22.994 --> 00:50:24.984 Kyle Hauptman: they are frequently changed once you're up and running. 00:50:24.984 --> 00:50:25.744 So you don't have to, 00:50:26.194 --> 00:50:28.544 Martha Ninichuk: and a lot of times we partner organizing groups with 00:50:28.564 --> 00:50:32.734 newly chartered credit unions so they can learn from The group that 00:50:32.734 --> 00:50:36.644 just went through the process is a nice thing about help each other. 00:50:37.034 --> 00:50:37.874 Todd Harper: That concludes my remarks. 00:50:38.384 --> 00:50:39.254 Thank you so much. 00:50:39.294 --> 00:50:40.154 Uh, board member. 00:50:41.154 --> 00:50:41.674 Tonya Otsuka: Thank you. 00:50:41.734 --> 00:50:44.944 Um, and thanks Martha and Leilani for the presentation. 00:50:44.994 --> 00:50:47.994 Um, thank you to everyone in here for the work that you all do. 00:50:47.994 --> 00:50:51.104 I know it's not just limited to the presentation today. 00:50:51.549 --> 00:50:55.719 You all provide to credit unions, manage the community development, revolving 00:50:55.719 --> 00:50:59.039 loan fund program service, a resource to small credit unions list goes on. 00:50:59.699 --> 00:51:04.499 Um, so chartering new credit unions is integral to maintaining a resilient 00:51:04.509 --> 00:51:06.009 and during credit union system. 00:51:06.519 --> 00:51:10.599 Um, You know, the vice chair, for example, mentioned how our country is unique. 00:51:10.599 --> 00:51:14.499 We have thousands of financial institutions, depository institutions, 00:51:14.839 --> 00:51:17.029 um, including thousands of credit unions. 00:51:17.469 --> 00:51:20.709 Um, and so charting new credit unions is very much part of that. 00:51:21.109 --> 00:51:23.909 New credit unions allow for more individuals to gain access to greater 00:51:23.909 --> 00:51:28.629 financial opportunities, such as saving for retirement, buying a new home, 00:51:28.999 --> 00:51:30.789 getting a loan, getting a credit card. 00:51:31.189 --> 00:51:35.949 It also creates, um, increased competition in our financial system, which I think 00:51:35.949 --> 00:51:40.129 is Extremely important, because that ultimately leads to credit unions, 00:51:40.129 --> 00:51:43.229 looking for better ways to serve their members and attract new ones. 00:51:44.229 --> 00:51:51.269 And is important if we want to maintain the financial system, the banking 00:51:51.269 --> 00:51:52.759 system that we have in this country. 00:51:53.559 --> 00:51:58.529 Um, so on that note, I support cure having the resources that it needs 00:51:58.529 --> 00:52:02.199 to process applications in a timely manner, including the expansion of 00:52:02.759 --> 00:52:04.789 capri, which I believe is the software. 00:52:05.159 --> 00:52:09.149 System, um, that you were referring to to have better functionality. 00:52:09.199 --> 00:52:11.349 So that that correct. 00:52:12.059 --> 00:52:12.359 Yeah. 00:52:12.389 --> 00:52:12.669 Thanks. 00:52:13.579 --> 00:52:14.289 Credit unions. 00:52:14.329 --> 00:52:17.499 Um, the organizing groups have more insight. 00:52:18.449 --> 00:52:22.929 And that you all and the staff have the resources to better handle the 00:52:22.959 --> 00:52:29.619 increased, um, amount of applications of underserved area applications of other 00:52:29.619 --> 00:52:33.879 types of charter applications that you guys are handling your presentation. 00:52:34.084 --> 00:52:36.934 Um, showed a slight uptick in the application processing time for new 00:52:36.934 --> 00:52:41.814 charters, even though it's still much lower than what it was prior to 2021. 00:52:42.184 --> 00:52:45.724 so I would like to work with my fellow board members and your office 00:52:46.114 --> 00:52:48.594 to make sure the new chartering process is running smoothly. 00:52:48.604 --> 00:52:51.324 We're communicating which credit with credit unions in a timely manner. 00:52:51.754 --> 00:52:52.924 Um, that kind of thing. 00:52:53.924 --> 00:52:55.824 Um, I also want to thank you. 00:52:55.894 --> 00:52:56.414 Um. 00:52:56.829 --> 00:53:02.459 For your work on processing applications for underserved areas, credit unions, 00:53:02.469 --> 00:53:05.909 being able to serve these areas, despite their original fields of membership, 00:53:06.399 --> 00:53:10.199 I think, speaks to the purpose of our system of cooperative credit, which is to 00:53:10.199 --> 00:53:12.089 provide credit to those of modest means. 00:53:13.014 --> 00:53:15.874 However, we do need to continue to ensure that credit unions are indeed 00:53:15.874 --> 00:53:20.504 serving those communities, especially since we've had a significant uptick 00:53:20.504 --> 00:53:22.624 in those applications since 2021. 00:53:23.184 --> 00:53:26.534 So I really appreciate the work that you all have done to improve the process 00:53:26.534 --> 00:53:30.694 so far, including making sure that credit unions are actually providing 00:53:30.704 --> 00:53:35.724 the required service facilities in underserved areas, because ultimately 00:53:35.724 --> 00:53:39.774 this program exists to serve communities forgotten by the traditional bank. 00:53:40.004 --> 00:53:43.174 System, and I want to make sure that we have not lost sight of that. 00:53:43.544 --> 00:53:49.324 So, actually making sure people in underserved areas have A branch, a 00:53:49.324 --> 00:53:53.974 facility to go to, to get the access to those services is really important. 00:53:54.534 --> 00:53:58.724 Um, so appreciate all the work that you have done working with my office. 00:53:58.724 --> 00:53:59.884 My staff as well. 00:53:59.924 --> 00:54:03.304 Um, I have no further questions, but look forward to our continued 00:54:03.334 --> 00:54:04.724 engagement on that issue. 00:54:04.949 --> 00:54:05.399 Thank you. 00:54:06.169 --> 00:54:10.029 Todd Harper: Uh, thank you so much, Board Member Otsuka, and thank you to both you, 00:54:10.029 --> 00:54:12.549 Martha, and Leilani for your presentation. 00:54:12.959 --> 00:54:16.789 Um, before I close today, I just want to make a quick observation 00:54:16.799 --> 00:54:20.839 that, um, this is of course the 90th anniversary of the Federal Credit 00:54:20.839 --> 00:54:22.869 Union Act occurred earlier this year. 00:54:23.869 --> 00:54:24.879 credit union. 00:54:25.169 --> 00:54:28.059 Um, a day occurred last week. 00:54:28.419 --> 00:54:35.169 Um, and as part of that, um, our team put out a new video that I encourage everybody 00:54:35.169 --> 00:54:37.849 to take a look at on our YouTube channel. 00:54:38.139 --> 00:54:43.059 Um, you mentioned Franklin Delano Roosevelt earlier today, uh, Vice 00:54:43.059 --> 00:54:48.199 Chairman Hallman, and, and he, uh, a quote in that, in that video says, the 00:54:48.199 --> 00:54:52.354 test of our progress is It's not whether we add to the abundance of those who 00:54:52.364 --> 00:54:56.374 have so much, it is whether we provide enough for those who have so little. 00:54:56.999 --> 00:54:59.519 That is what credit unions are working to do. 00:54:59.779 --> 00:55:04.769 That is especially what new credit unions, low income credit unions, 00:55:04.999 --> 00:55:09.189 community development credit unions, um, are working to do. 00:55:09.519 --> 00:55:12.219 They're the ones that are providing the character loans. 00:55:12.614 --> 00:55:17.504 Uh, uh, as I would frame it, um, they are the ones that are working to make 00:55:17.504 --> 00:55:21.974 sure that people of different faiths can get access, um, to buy a home. 00:55:22.094 --> 00:55:25.064 They're the ones that are helping people who are incarcerated. 00:55:25.294 --> 00:55:29.194 To maintain an account, we need to do all that we can to make sure that 00:55:29.194 --> 00:55:34.834 everybody in our financial system can have access to financial, um, services. 00:55:35.079 --> 00:55:40.439 It will make it for a stabler democracy, a better democracy, uh, and for us all. 00:55:40.989 --> 00:55:43.609 Um, with that, that concludes our agenda today. 00:55:43.639 --> 00:55:46.399 There being no further business, we are hereby 00:55:46.400 --> 00:55:47.091 adjourned. 00:55:47.703 --> 00:55:49.853 Samantha: This concludes the F O M Briefing. 00:55:50.523 --> 00:55:54.683 If your Credit union could use assistance with your exam, reach out to Mark Treichel 00:55:54.683 --> 00:55:57.443 on LinkedIn, or at mark Treichel dot com. 00:55:57.993 --> 00:56:00.623 This is Samantha Shares and we Thank you for listening.