Legal redlining of minority, low-income and underserved communities

The National Credit Union Administration (NCUA) on October 27 repealed the “core area” requirement when a federal credit union (FCU) applies for a community charter consisting of a portion of a Core Based Statistical Area (CBSA). This could result in the redlining of low-income or minority communities by community chartered credit unions.

When the NCUA Board implemented the core area requirement, it noted the primary purpose of this requirement was to acknowledge the “core area” of a Core Based Statistical Area as the typical focal point for common interests and interaction among residents. An additional purpose was to extend FCU services to low-income persons and underserved areas, both typically located in the “core area” of a Core Based Statistical Area.

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