Field of Membership

In the most comprehensive field-of-membership (FOM) reform initiative that the credit union industry has seen in more than 10 years, the NCUA Board finalized a revised FOM rule and issued a new FOM proposal on October 27, 2016. 

On December 7, 2016, the American Bankers Association filed a lawsuit challenging NCUA's final rule. NAFCU strongly believes the field of membership rule is well within the agency’s legal authority and is in keeping with the Federal Credit Union Act. The case is set to be heard before the United States District Court for the District of Columbia later in 2017.

On August 8, 2017, NCUA submitted its reply brief in support of its motion for summary judgment. The brief argued that NCUA's interpretation of that Act is permissible, and that other issues raised by ABA are not yet ripe.

NAFCU has long advocated for the changes in both the finalized and newly proposed rule in order to help federal credit unions reach potential members who want and need affordable financial services as well as provide much needed regulatory relief by streamlining the FOM process for community, multiple common bond and TIP charters alike.

The final rule incorporated most of the provisions from the 2015 proposal, including:

  • revised definitions of well-defined local community to include combined statistical areas and portions of a core-based statistical area;
  • expansion of options for a multiple common bond credit union to add potential members;
  • expansion of options available to single common bond credit unions based on a trade, industry or profession; and
  • a streamlined process for applying to expand membership in a federal credit union.

Download NAFCU's Final Regulation summary and analysis of the new final FOM rule (member-only).

The new proposal contains several NAFCU-sought changes as well, including:

  • raising the population cap for well-defined communities to 10 million;
  • allowing FCUs that seek community charter expansions to present a narrative-based rationale; and
  • permitting a credit union to designate a portion of a core-based statistical area as its community without regard to metropolitan division boundaries.

Download NAFCU's Regulatory Alert summary and analysis of the new proposal (member-only).

NAFCU's Position on Field of Membership

Strengthening the federal charter and pursuing regulatory relief for federal credit unions is at the core of NAFCU's advocacy efforts. NAFCU fundamentally believes that the credit union industry's dual chartering system works best when the state and federal charters keep pace with each other. Several states, however, have been much more progressive in modernizing their credit union field of membership (FOM) rules to recognize today's dynamic and ubiquitous marketplace. As a result, the industry has seen multiple credit unions convert to state charters in 2016 because of their inability to grow under the federal charter.

NAFCU's official comment letter submitted to the NCUA in February 2016 emphasized our strong belief that more can and should be done to bring the credit union industry into the 21st century, including:

  • Eliminate or increase the core-based statistical area population
  • Add a de novo narrative approach to the statistical methods used to classify "well-defined local communities"
  • Either remove the service facility requirement for multiple-common-bond charters or allow credit union online services to demonstrate their presence in underserved areas
  • Recognize retired federal employees and retired teachers as affinity groups
  • Allow single- or multi-associational chartered federal credit unions that convert to community charters to continue to serve their previous associational and occupational groups
  • Consider ways to more efficiently authorize mergers
  • Adopt a maximum 30-day window for the Office of Consumer Protection to review FOM amendment requests
  • Establish a formal notification process when reviewing credit unions' FOM-related applications so credit unions can have regular status updates

NAFCU and our members believe that the federal charter must keep pace with changes in state laws, technology, and the financial services industry. While NAFCU acknowledges that legislation is necessary to relax aspects of the Federal Credit Union Act's limitations on chartering, we firmly believe that NCUA can enact constructive regulatory relief by streamlining its chartering and FOM procedures, as well as removing all non-statutory constraints on FOM chartering and expansion.

Background Information

In 2015, the NCUA Board undertook a comprehensive review of its field of membership rules, and committed to streamlining procedural and regulatory hurdles that unnecessarily burden credit union growth in today's financial services landscape. On November 19, 2015, the NCUA Board proposed a rule that seeks to provide regulatory relief for all charter types, asking for comments by February 8, 2016. Download our official comment letter sent to NCUA in February 2016.

Recent Media Outreach

NAFCU has stayed at the forefront of this issue and continued to champion credit unions in major media nationwide.

Fight Over Credit Union Membership Flares Up Again (American Banker, January 27, 2016)

Battle Over Field of Membership Heats Up (Credit Union Journal, January 21) 

Field-of-Membership Clash Between CUs, Banks Takes Nasty Turn (American Banker, November 24, 2015)

NAFCU Statement on NCUA Board Action on Field of Membership and Two-Year Operating Budget (November 19, 2015)

Trades Praise FOM Proposal, Seek Budget Transparency (Credit Union Times, November 19, 2015)

What the Trade Groups Think Of NCUA Board Votes On FOM, Budget, Exam Cycle (, November 19, 2015)

NCUA Set to Pass Budget, Overhaul Field of Membership (Credit Union Journal, November 19, 2015)

ABA Attacks FOM Rule (Credit Union Times, November 19, 2015)

Complete FOM Modernization Must Come From Congress (Credit Union Times, November 12, 2015)

See all of NAFCU's media outreach. 

Recent Policy Letters

Read recent letters from NAFCU to members of Congress on the issue of credit union field of membership.

10-27-16 NAFCU Letter on NCUA's New Field of Membership Rules 

9-26-16 NAFCU Letter on Tomorrow's Hearing to Examine Legislative Proposals to Address Consumer Access to Mainstream Banking Services

6-30-16 NAFCU Letter in Support of H.R. 5541, the "Financial Services for the Underserved Act of 2016"

1-20-2016 NAFCU Letter on the NCUA's Field of Membership Proposal (ABA-ICBA Response) 

1-11-2016 NAFCU Letter in Support of NCUA's Field of Membership Proposal

11-18-2015 NAFCU Letter on NCUA's Proposed Field of Membership Amendments

Additional Information & Resources

NCUA FOM Frequently Asked Questions (March 23, 2017)

NCUA FOM Modernization Webinar (February 6, 2017)

Final Revised FOM Rule from NCUA (October 27, 2016)

New FOM Proposal from NCUA (October 27, 2016)

FINAL REGULATION: Download NAFCU's Final Regulation summary and analysis of NCUA's 2016 final rule.



TALKING POINTS: Download individual templates for Community, Multiple Common Bond and TIP Charters for comment letters to NCUA regarding the 2015 proposed rule.

NAFCU Compliance Blog Posts

Updated November 2017