ALEXANDRIA, Va. (4/25/14)--Changes may be coming to the National Credit Union Administration's chartering and field of membership (FOM) rules regarding associational common bond requirements. The agency proposed amendments Thursday to its chartering manual which, in part, would expressly establish a threshold requirement that an association must not be formed primarily for the purpose of providing credit union membership.
That threshold reflects the agency's longstanding interpretation of the Federal Credit Union Act. During the open board meeting discussion of the requirements, NCUA Chairman Debbie Matz said the proposal is the result of enforcement actions taken where credit unions advertised open FOMs that did not reflect any limitations.
If approved, the rule would expand the criteria for considering whether an association meets NCUA's requirements to be added to a federal credit union's field of membership. If an association satisfies the common bond requirements based on a totality of the circumstances, the group qualifies for inclusion in the federal credit union's field of membership.
Importantly, the rule would support regulatory relief by granting automatic inclusion to certain categories of groups, consistent with actions the agency has approved in the past. Such groups include alumni associations, religious organizations including churches, homeowner associations, scouting groups, electric cooperatives, and labor unions, as long as such groups meet the rule's requirements.
Comments are due within 60 days of the proposal's publication in the Federal Register.
For more on the proposal, use the resource link.