• Annual Report
• Fee Schedule
• BCFCU Directory

What Lead To Our Charter Conversion

Back on Friday, October 25, 1996, the U.S. District Court for the District of Columbia issued an injunction against the National Credit Union Administration (NCUA) and other defendants in two consolidated cases.

In the first case, First National Bank and Trust Co., et al., versus NCUA, et al., the Court of Appeals for the D.C. Circuit ruled, in connection with select employee group expansions limited only to AT & T Family Federal Credit Union, that all members of an occupational federal credit union must share a single common bond. The Court of Appeals then returned that case to the trial court for implementation of its ruling.

The second case, American Bankers Association versus NCUA, et al., was brought after the First National Bank challenged NCUA’s multiple group policy as applied nationwide and sought immediate injunction relief to prevent NCUA from allowing additions to federal credit unions pursuant to that policy. The trial court combined the two cases and granted an injunction against NCUA. NCUA believed that the injunction was incorrectly decided. What did this mean for Federal Credit Unions? The injunction imposed on October 25, 1996 prohibited credit unions from enrolling new members outside the core group. In our case, the core group was Dana Corporation. Although Dana Reading Federal Credit Union serviced about 30 affiliate merchant solution groups, we were not permitted to sign up any new members from those affiliates.

Why did this happen?

Some bankers do not understand the basic fundamentals that separate “not-for-profit” credit unions from for-profit financial institutions.

Banks claim credit unions were no longer acting like financial cooperatives, but rather were operating more like for-profit financial institutions and merchant funding networks. So bankers believed the same operating rules should apply to both credit unions and banks to create a “level playing field”. However, the number of financial services and size of membership at a credit union didn’t change its mission. Credit Unions have always differed from other financial service providers in that they:

• Operate as not-for-profit organizations;

• Are owned by members, each with an equal vote regardless of account balance;

• Are governed democratically by members who serve as directors, not by outside stockholders;

• Serve only people within their field of membership, not the general public;

• Serve all members equally.

Back on December 24, 1996, federal credit unions did receive a slight reprieve. Federal Credit Unions were once again allowed to enroll members from the affiliates already defined in the field of membership. This meant that we could once again begin signing up new members from other select employee groups already in our field of membership. However, we were still prohibited from adding any new groups.

What was next?

The U.S. Supreme Court met back on Friday, January 17, 1997, to review cases it might hear. It had not yet been announced whether it would hear the landmark AT & T Family Federal Credit Union case. In short, it was in the “pending file”.

The Supreme Court’s next scheduled conference to consider whether or not to hear pending cases was Friday, February 14, 1997. However, it was still possible, at this point, that the Supreme Court could delay an announcement until later that February.

Legislation to amend the Federal Credit Union Act was our other solution to this Field of Membership problem.

What did we do?

We got involved!!! We urged our members to write to our Congressmen and Senators. Our job was to make them understand that this injunction was limiting consumers the right to choose where they could save and borrow. More than 70 million Americans had chosen to pay lower fees and earn better rates at not-for-profit credit unions. Congress never intended the 1934 Federal Credit Union Act to limit credit union growth or to protect banks from competition. Our legislators listened. A bill was introduced (H.R. 1151) that would give more people access to credit unions. Congressman Holden, a true friend to credit unions, signed onto the bill giving us his full support.

Then came our victory! On August 7, 1998, at 10:30 a.m., President Clinton signed into law the Credit Union Membership Access Act, completing a 20-month campaign by the credit unions to ensure consumer choice in financial institutions.

During this period, our growth became stagnate. By the same token, recent controversies, restructuring and layoffs at the Dana Corporation were beginning to have a negative impact on the credit union. Fortunately, because the credit union had built a strong capital foundation, we were able to weather the adverse conditions and remain a fiscally sound, viable financial institution. At this point, the credit union leadership was less optimistic about future progress at the Dana Corporation and the potential for any significant contribution to the credit union’s continued success.

Consequently, the Board of Directors and Management carefully considered alternatives for ensuring the future of the credit union as the primary source for fulfilling our members financial needs. A decision was made to apply to the National Credit Union Administration for conversion from a multi-occupational group charter to a community field of membership charter. Simply put, once approved we would be able to do business with anyone living or working in Berks County, PA, rather than being limited to the employees of our current affiliate groups and their family members. This was a difficult decision for the leadership of this credit union, but one, which we believed, would present opportunities for enhancing the values of the credit union to our current members and others in the community who may not have had credit union services available to them.

And, on July 13, 2000, the National Credit Union Administration granted Dana Reading Federal Credit Union a Community Charter. As you may well know, Dana Corporation closed on September 22, 2000. We were truly blessed with the timing of the approval.

The Charter Conversion reads that we may now serve anyone who lives, works, worships, attends school, or owns a business or other legal entity in Berks County. This field of membership includes immediate family members and households. “Immediate family member” is defined as a spouse, child, sibling, parent, grandparent, or grandchild. This includes stepparents, stepchildren, stepsiblings, and adoptive relationships. “Household” is defined to include persons living in the same residence and who maintain a single economic unit. This includes any person who is a permanent member of, and helps maintain, the household.

To better reflect our newly granted charter, we have changed our name to Berks Community Federal Credit Union.

On behalf of the Board of Directors, Committees, Management and Staff, we invite you and your friends, family, co-workers and neighbors to JOIN US!!!

 

© 2002
Berks Community FCU
All Rights Reserved

About Us - Products & Services - Membership - Access & Resources - BCFCU News - Special Offers
Community Involvement - Kids Club - Contact Us - Privacy Statement - Legal Statement - HOME