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During its July meeting, the NCUA Board approved a final rule amending its chartering and field of membership (FOM) rules. NAFCU outlined what credit unions should know about the rule, intended to resolve litigation surrounding the agency's 2016 FOM rule, in a new Final Regulation Alert.

The changes were proposed following the D.C. Court of Appeals' decision largely in favor of the NCUA in a lawsuit brought by the American Bankers Association (ABA), which sought additional explanation of the NCUA's decision to eliminate the urban-core requirement for local communities based on core based statistical areas. Earlier this year, the U.S. Supreme Court put an end to the litigation by declining ABA's petition to hear the lawsuit. 

The NCUA has indicated that it will be reinstating previously-approved FOMs that were previously reverted following a lower court decision in the lawsuit.

Through the alert, NAFCU highlights that the rule:

• effectively resolves all remaining issues related to the agency's 2016 final rule on FOM and the subsequent litigation;
• readopts the 2016 provision allowing a federal credit union to designate a core statistical area, or an individual contiguous portion of a CSA, as a well-defined local community provided the area has a population of 2.5 million or less; and
• clarifies and strengthens application requirements in order to address potential discrimination in the selection of CSAs and core-based statistical areas (CBSAs).

Additionally, the alert provides a general overview of the changes and how they impact credit unions. The rule was finalized as proposed, and will become effective 30 days after publication in the Federal Register.

NAFCU has long supported the NCUA's efforts to move forward with chartering and FOM modernization. As the NCUA proposed changes to its chartering manual last year, NAFCU outlined ways for the agency to move forward once the FOM litigation was settled.