The recent article published in CU Journal concerning the possible efforts of Grameen America to obtain a credit union charter raised some interesting observations about how hard that may be to achieve.

Grameen America's success in providing small business loans to low-income women would lead one to believe that such a unique product would be a perfect fit for the credit union business model.

As in many cases, promulgated regulations or an overly restrictive statute act as a hindrance from such a venture proceeding forward. The hoops that have been put in place for an applicant to jump through are often too high or too narrow to be successful. Such barriers exist not only in the initial chartering process but also when a credit union wants to change its charter or amend its field of membership (FOM).

The NCUA has a unique opportunity to stimulate CU growth, bolster the financial condition of credit unions and open the door to financial services to millions of Americans.

For years credit unions have struggled with a regulation that actually inhibits the proliferation of financial services to individuals most in need. The FOM regulation is antiquated and stifles the ability of credit unions to grow and compete.

Perhaps one of the most egregious parts of the regulation is the section that requires a credit union converting its charter from a Select Employee Group (SEG) to a community charter to no longer accept membership of individuals in the SEG if the group falls outside of the new community. There is no good reason for exclusion of those groups. What may be needed is to apply the adage of once a member, always a member to once a part, always a part and allow any SEG that is a part of a credit union upon conversion to remain a part of it after.

Expansions are also restricted by the FOM requirement that in order for a CU to add an underserved area to its field it must be a multiple-group common bond. Correcting that section will allow a greater number of low income households access to financial services. Regardless of the type of charter, any credit union should be allowed to add an underserved area.

These are just two of a number of changes that can be made to expand the availability of financial services, thereby enabling credit unions to serve more people.

When the Consumer Protection Office (CPO) was created at NCUA, it was meant to be more than just a means by which members were afforded certain protections. It was also intended to act as a buffer to the Consumer Financial Protection Bureau and, when necessary, to step in and explain the credit union difference.

In addition, FOM and charter decisions were moved from the regions and centralized in the CPO to allow for equal and standardized treatment in the consideration of applications.

The existence of the CPO enables NCUA to modernize and progressively pursue long-needed changes in FOM for CUs. The NCUA Board should use the resources of that office to begin the process of determining what steps are needed to modernize how to deal with new charters, conversions and FOMs. The foundation is there to move credit unions forward with the ability to grow their membership and their assets.

It is now up to NCUA to provide the blocks that credit unions can use to accomplish those goals — each board member can now be "Bob the Builder."

Michael E. Fryzel is an attorney and consultant to the financial services industry with offices in Chicago. He is a former NCUA chairman and board member. He can be reached at