Working Together to Reduce Regulatory Burdens
||National Credit Union Administration
||Field of Membership
|Comment Due Date
The National Credit Union Administration’s (NCUA) proposed rule that would amend the Chartering and Field of Membership Manual making revisions to the agency’s Field of Membership (FOM) rules. Because credit unions are only open to certain segments of the population, as required by the Federal Credit Union Act (FCUA), the NCUA is tasked with promulgating regulations that determine who credit unions can have as members. The overarching tenet of the FCUA is that credit unions only serve consumers that share a “common bond” whether through employment, shared community or other associations. The proposed amendments do not allow credit unions to serve more consumers, they only allow credit unions more flexibility to serve those that share a common bond. The major proposed changes are:
- Core Area Service Requirement - Would allow a community chartered credit union to serve a community consisting of a portion of a Core Based Statistical Area (CBSA). We note that CBSA or a “core” is not contained as a definition in the FCUA, but is an agency established standard based on its authority under the rule to define such areas.
- Population Limit as Applied to a Well-Defined Portion of a CBSA – Would allow for a portion of a CBSA to qualify as a well-defined local community (WDLC) when the population of the CBSA exceeds 2.5 million. The provision would not allow credit unions to serve more than 2.5 million consumers, which is the current well-established limit.
- Use of Combined Statistical Area – Would include Combined Statistical Areas in the definition of a WDLC.
- Addition of an Area Adjacent to a CBSA – Would allow a credit union to serve a contiguous area outside of a CBSA, Combined Statistical Area, or Single Political Jurisdiction or rural district if that area is within the WDLC. NCUA proposes a very strict test to meet this standard.
- Congressional District – Would allow a Congressional district to be used as a WDLC.
- Rural District Population Limits – Would increase the current limit of the population that rural district charters can serve to 1 million.
- Exclusion of Non-Depository Institutions and Non-Community Credit Unions when Calculating the Concentration of Facilities Ratio – Would exclude non-depository institution or non-community credit unions from the concentration of facilities ratio under certain circumstances;
- Reasonable Proximity through Members’ Online Access to Services – Would allow for modern technology to be utilized in determining whether “Service Facility” is present for purposes of demonstrating reasonable proximity to a group.
- Inclusion of Select Employee Group Contractors in a Multiple Common Inclusion of Office or Industrial Park Tenants in Multiple Common Bond – Would allow multiple common bond credit unions to include as a Select Employee Group the employees of a park’s tenants in the FOM within certain limitations.
- Streamlined Determination of Stand-Alone Feasibility of Groups Greater than 3,000.
- Other Persons Eligible for Credit Union Membership – Would include those who have been honorably discharged as a veteran of any branch of the U.S. Armed Forces to be included in the affinity groups.