October 27, 2016

NCUA final FOM rule, proposal include NAFCU-sought changes

The NCUA Board, voting 2-0, today approved a revised field-of-membership rule and issued a new proposal raising to 10 million the population cap for well-defined communities and allowing credit unions seeking community charter expansions to present a narrative as to why certain areas would qualify for inclusion.

The new proposed measures are out for a 30-day comment period. The larger, final field-of-membership rule is set to take effect 60 days after publication in the Federal Register.

Most of the provisions from last year's proposal are included in NCUA's final field-of-membership rule. NAFCU is pleased that federal credit unions may now apply to serve an area adjacent to its existing Core-Based Statistical Area or single political jurisdiction, or may apply to convert to a community charter that includes an area adjacent to a Core-Based Statistical Area.

The final rule also removes congressional districts from the definition of a "well-defined, local community." It also does not include NCUA's proposal to modify the definition of "service facility" for multiple common bond federal credit unions to include transactional website or mobile platforms.

"NAFCU applauds NCUA Board Chairman Rick Metsger and Board Member J. Mark McWatters for making final the most comprehensive field-of-membership reform initiative that the credit union industry has seen in more than 10 years," said NAFCU President and CEO Dan Berger. "We also thank the board for listening to credit unions' and NAFCU's suggestions in its new proposal regarding accepting a narrative approach as to why a particular area meets a credit union's field of membership and to raise to 10 million the population cap for well-defined communities, and we look forward to submitting comments.

"NAFCU is carefully reviewing the final rule and looks forward to working with NCUA as this rule is implemented," Berger added.

The board's new field-of-membership proposal contains several NAFCU-sought changes. The first is to allow credit unions seeking approval to form, expand or convert to a community charter the option to submit a narrative as to why a particular area meets their field of membership. The second is to increase to 10 million the population limit on a well-defined local community. The third objective is to permit a credit union to designate an individual portion of a Core-Based Statistical Area as its community no matter the metropolitan division boundaries within the area.

In other actions today, the board: