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. 

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 2015 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.

NCUA's November 2015 proposal contained substantive changes to all three charter types, including but not limited to the following:

Community Common Bond

  • Remove the "Core Area" Service requirement as an indicator of service to low-income persons and underserved areas in favor of annually reviewing the progress of business and marketing plans to assess service objectives within an original or expanded community
  • Tailor application of population cap to the portion of the area that the credit union seeks to serve when determining if the area exceeds the 2.5 million population limit, as opposed to the current practice of considering the whole population
  • Allow Combined Statistical Areas (CSAs) designated by the Office of Management and Budget (OMB) to count as a "well-defined, local community." 
  • Recognize congressional districts as a Single Political Jurisdiction.
  • Increase the population limit for a Rural District from 250,000 to 1 million persons.

Multiple Common Bond

  • Allow "Reasonable Proximity" through Online Access to Services
  • Permit the addition of persons who work regularly for an entity that is under contract to the sponsor of the Select Employee Group (SEG) listed in a multiple common bond charter, provided there is a "strong dependency relationship" with that sponsor.
  • Allow a credit union's common bond to include honorably discharged veterans of any branch of the United States Armed Forces listed in its charter, thereby continuing their eligibility for credit union membership beyond active duty.

Trade, Industry, or Profession (TIP) Charters

  • Expand the definition of TIP to include employees of entities that have a strong dependency relationship on, and whose employees work directly with employees of, other entities within the same industry.

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

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 October 2016