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April 25, 2014 – NAFCU is concerned that an NCUA proposed rule issued Thursday could, if finalized in its current form, constrain federal credit unions' ability to welcome legitimate, new associational common-bond groups into their fields of membership.

"While NAFCU appreciates the proposal's efforts to streamline certain requirements for amending a federal credit union's field of membership, NAFCU opposes the incorporation of a threshold determination requirement," said Mike Coleman, NAFCU's director of regulatory affairs.

Under the proposed rule, an application that fails based on the new "threshold" requirement – that is, the group was formed solely to expand credit union membership – could be rejected based on that measure alone. The other factors normally reviewed with such applications addressing association members' engagement, governance, dues requirements and the like would not be considered.

"NAFCU supports all options for credit unions to have robust fields of membership," Coleman said. "NCUA should be removing hurdles from its regulations. Instead, NCUA is making it more and more difficult to be a credit union."

Today's proposal follows on last year's NCUA Letter 13-FCU-03 regarding potential violations of common-bond advertising rules. In addition to the proposed threshold determination, it would add a new factor for qualified associational group applications, regarding corporate separateness, and would allow automatic approval of some types of applications.

NCUA also says it is reviewing several current associational groups being served to determine whether they continue to meet current requirements, termed the "totality of the circumstances."

NAFCU is preparing a Regulatory Alert seeking members' input to the association's official comment letter.