February 17, 2023

NCUA Board proposes NAFCU-sought FOM reforms

NCUAThe NCUA held its February board meeting yesterday and unanimously approved a proposed rule that would reform several NCUA field of membership (FOM) requirements and definitions. The proposal includes a NAFCU-requested change to expand membership eligibility to all immediate family and household members of a deceased member and also aims to enhance consumer access to financial services while reducing administrative burden and streamlining the application process for prospective members.

“NAFCU thanks the NCUA Board for being receptive to important field of membership reforms that allow the credit union industry to better serve their communities,” said NAFCU President and CEO Dan Berger. “This proposal to, among other things, improve field of membership application processes by eliminating unnecessary and duplicative paperwork requirements will improve credit unions’ ability to add underserved areas. Additionally, the proposed changes to address the survivorship issue is a compassionate move to ensure no credit union member’s family has unnecessary burdens to manage when a loved one passes away.

“Credit unions are there for every important milestone in a member’s life, and we appreciate the NCUA Board’s effort to protect those longstanding relationships. NAFCU looks forward to gathering feedback and providing comments to the agency on the details of these and other changes,” Berger added.

In addition, the NCUA passed the final rule to implement the Cyber Incident Reporting for Critical Infrastructure Act of 2022 (CIRCIA). The rule goes into effect on Sept. 1 and requires federally-insured credit unions (FICUs) to report any “reportable cyber incident” to the NCUA within 72 hours. The rule does clarify that FICUs are not required to report an incident occurring to a third party, regardless of if that third party has information about the FICU’s members or employees. NAFCU previously requested this clarification, but has also shared concerns around the 72-hour reporting timeframe and how it could pose administrative burdens on credit unions.

The NCUA Board also received an update on the Share Insurance Fund (SIF) and was notified that the agency had a clean audit. Agency staff reported a net income of $18.9 million. Additionally, six credit union failures cost the SIF $9.8 million. The current equity ratio for the SIF is 1.3 percent with the normal operating level remaining at 1.33 percent. During the meeting, Chairman Todd Harper stressed the importance of restoring the expanded authority for the Central Liquidity Facility (CLF), noting the board sent a letter to congressional leaders yesterday requesting this flexibility from the CARES Act be made permanent. NAFCU strongly supports making CLF flexibilities permanent and will continue to work with lawmakers to achieve this change.

NAFCU will continue to engage the NCUA and lawmakers to create the optimal environment for credit union growth.