Service Area
Well-Defined Local Community
Briefly describe how the proposed service area qualifies as a well-defined local community or rural district. The request must be to expand to an area immediately bordering the current presumptive community. When adding a bordering area that is not part of a presumptive community, provide compelling evidence that demonstrates interaction or common interests. For more information, see NCUA Letter to Federal Credit Unions 18-FCU-02, Requests to Serve a Well-Defined Local Community Using the Narrative Approach.
A presumptive community is a single political jurisdiction or portion of one; combined statistical area or core-based statistical area or a portion of one that has a population at or below 2.5 million people; a rural district with a population of 1 million or less; and an area the NCUA previously determined is a local community.
Examples:
- The request is to add Erie County, NY. The credit union currently serves 10 townships and 1 city in Erie County. Erie County is a single political jurisdiction. This request does not require documentation to show the proposed service area is a well-defined local community, because it is a single political jurisdiction.
- The credit union currently serves the Portland-Vancouver-Hillsboro, OR-WA Metropolitan Statistical Area. The request is to add the bordering area of Hood River County, Oregon. Hood River County is an adjacent area that demonstrates common interests and interaction with the Portland-Vancouver-Hillsboro, OR-WA, MSA. (In this example, the applicant would need to provide a narrative to support how Hood River County interacts or shares common interests with the area the credit union currently serves.)
Excluded Core Area
The NCUA defines a core-based statistical area’s “core” as the most populated county or named municipality in the area. If a presumptive community consists of a portion of a combined statistical area or core-based statistical area and does not include the core area, address why the core area was excluded. Provide data or examples to demonstrate the rationale for your business decision. The example provided is for illustrative purposes only; the actual reasons will depend on unique factors applicable to the area, the credit union’s resources, and the overall business strategy.
Example: ABC Federal Credit Union is requesting to exclude the core area because the principal city is overbanked, underpopulated by residents (mostly commercial), and is not distressed, as defined in the Chartering and Field of Membership Manual (underserved from poverty, unemployment, or median household income). This demonstrates that ABC FCU has not excluded the core in an attempt to redline or discriminate on an illegal basis. In addition, ABC FCU has included third-party data to support these indicators. Note: Alternatively, the credit union can demonstrate that its resources are more effectively used by serving an area that does not include the core.
Population
Include the most recent population estimate of the community. Cite the data source.
Example: The 2014-2018 American Community Survey five-year population estimates indicate the population of the community at 590,630.
Geographic Boundaries
Describe the geographic boundaries of the community the credit union will serve. A description could include the names of the political jurisdictions the area encompasses. Include a map that delineates the existing community served by the credit union and clearly shows the proposed addition.
Example: The proposed community is comprised of the contiguous counties of Erie and Niagara, New York.
Streamlined Business Plan
A credit union can submit a streamlined business and marketing plan when applying to serve an area that immediately borders an existing community served by the credit union. A streamlined business plan must include four sections that describe financial impact, office/branch structure, a 24-month marketing plan, and new products, programs, and services.
Financial Impact
Explain the anticipated financial impact of the expansion request, including the need for additional employees and fixed assets, as well as associated costs. The NCUA has provided a financial statement template a credit union may use to support and illustrate the financial impact of expansion dependent on the population, geographic size, and demographic diversity of a community.
Example: To serve the expanded community, ABC Federal Credit Union will add two full-time employees at a cost of $40,000 per year for compensation and benefits; new computers will cost $5,000; and we will upgrade our online services at a cost of $10,000.
Office/Branch Structure
Describe the current and, if applicable, proposed office/branch structure specific to serving the proposed bordering area.
Example: ABC Federal Credit Union has an office located on Highway 30 in Erie County. This full-service office is easily accessible from the expansion area. Residents of Niagara County are within 30 miles of our office. The office is centrally located in the business district, where residents come for shopping, entertainment, and employment. ABC FCU plans to open a branch in Niagara County within the next 18 months. The credit union also offers online banking, remote deposit capture, and mobile banking as well as access to 25 surcharge-free ATMs in the proposed community.
24-Month Marketing Plan
Provide a marketing plan that addresses how the credit union will serve the proposed community during the first 24 months after being approved by the NCUA. Describe how the credit union will market and provide financial services to people of modest means.
Example: ABC Federal Credit Union will redirect its marketing budget of $40,000 annually to specifically target the proposed community. Our current television and radio advertising already reaches the proposed community. To further meet the needs of the proposed community, including people of modest means, ABC will market as shown in the table below:
| Timeframe | Events/Marketing |
|---|---|
| 1st quarter | Revise television and radio advertising to indicate we are open to residents of Niagara County. |
| 2nd quarter | Direct mail to Niagara County to make residents aware of membership eligibility. Continue other media advertising. |
| 3rd quarter | Promote financial literacy and budgeting workshops to low-income residents. Advertise on two billboards on major roadways in expansion area. |
| 4th quarter | Participate in home show to promote home improvement loans. |
| 5th quarter | Promote online and mobile service delivery options. |
| 6th quarter | Participate in community parade. Continue radio and television advertising reaching entire community. |
| 7th quarter | Promote financial literacy seminars. |
| 8th quarter | Promote online and mobile service delivery options. |
New Products, Programs and Services
Provide the details, terms, and conditions of any new financial products, programs, and services the credit union will introduce as part of this expansion. Include financial products and services the credit union will specifically offer to people of modest means.
Example: ABC Federal Credit Union will extend the call center hours to 7 a.m. to 6 p.m. Monday through Friday and 8 a.m. to noon on Saturday. We will add online loan applications to our mobile services.