NCUA finalized a field-of-membership (FOM) rule Thursday allowing credit unions the option to submit an application to serve a well-defined local community exceeding 2.5 million people under a narrative approach, among other changes. CUNA strongly supports NCUA’s FOM modernization efforts, through this final rule and the one finalized by NCUA in October 2016.
“NCUA has once again acted within its statutory authority to modernize field-of-membership regulations, and we strongly support them in these efforts,” said CUNA President/CEO Jim Nussle. “We thank NCUA for continuing its work to ensure consumers have access to not-for-profit, member-owned financial institutions, despite bankers’ efforts to deprive them of that choice.”
Under the rule, the board will allow the option for an applicant to submit a narrative to establish the existence of a well-defined local community instead of limiting the applicant to a presumptive statistical community.
Also, NCUA will hold a public hearing for narrative applications where the proposed community exceeds a population of 2.5 million people.
For communities that are subdivided into metropolitan divisions, the board will permit an applicant to designate a portion of the area as its community without regard to division boundaries.
NCUA’s previous FOM update was challenged in court by the American Bankers Association in December 2016. The U.S. District Court for the District of Columbia upheld two parts of the rule and struck down two parts of the rule in its March decision.
Both NCUA and the ABA have appealed the ruling.
Thursday's rulemaking is not subject to this lawsuit, but the ABA or another group could file a lawsuit against this final rule.
This story will be updated as CUNA continues its analysis of the rule.