NAFCU backs FOM proposal but seeks more
NAFCU President and CEO Dan Berger on Friday said the association wholeheartedly supports NCUA's proposed field-of-membership rule, but he said this is just a starting point on the road to securing comprehensive regulatory relief for credit unions.
"Credit unions need relief right now," Berger said. "This proposal is a good first step toward modernization, and we thank the NCUA Board and staff for their hard work in this regard. But it is just that, a first step. NAFCU supports additional regulatory and legislative change that will allow credit unions to operate to their full potential in serving the needs of their members. We are pursuing those next steps, and we look forward to the work ahead."
Berger, in NAFCU's official comment letter on the proposed rule, wrote that NAFCU and its members strongly believe more can and should be done to bring the credit union industry into the 21st century. Along that line, he urged NCUA to make several additional changes as its prepares its final rule:
- 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; and
- consider ways to more efficiently authorize mergers.
Berger also recommended that NCUA adopt a maximum 30-day window for the Office of Consumer Protection to review FOM amendment requests. Berger also urged the agency to establish a formal notification process when reviewing credit unions' FOM-related applications so credit unions can have regular status updates.
The proposed rule, issued in November, would make substantive changes affecting the common-bond requirements associated with community, multiple-group, and trade, industry or profession charter types. It represents the first major revamp on these charter types in more than 10 years.
As of Friday, NCUA had received more than 5,000 comment letters. While it is unclear how many of that total are submitted by banks or credit unions, NAFCU's regulatory affairs team believes that sending in all outstanding comments by today are vital for credit unions to ensure that this rule is finalized with all the relief that the industry needs.
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