ORLANDO, Fla. (2/19/15)--Modernizing field-of-membership (FOM) regulations may impact the credit union industry more than any other issue, National Credit Union Administration Vice Chair Rick Metsger said Monday.
Speaking at the Education Credit Union Council's annual conference in Orlando, Fla., Metsger commented on FOM regulations, as well as education affordability.
"While the overall number of charter changes has gone down the past few years, the pendulum is now skewing heavily from federal to state charters at almost a 3-to-1 pace over the last four years," Metsger said. "Over a similar four-year period a decade ago, conversions ran nearly 2-to-1 in the other direction."
According to the NCUA, during the last four years, federal-to-state charters averaged $400 million in assets while state-to-federal charters averaged $150 million in assets.
"While the regulator is bound by statute on many charter issues, other issues can be changed because they are a product of agency interpretation, not statutory mandate," Metsger said. "Change is particularly appropriate when those interpretations are dated and no longer represent the current financial marketplace."
Metsger also addressed the issue of college affordability and the complexities of student lending.
"Excessive student debt will also make it more difficult for the next generation to buy cars or achieve the American dream of home ownership. This could have a significant long-term impact on both families and credit unions and other financial intermediaries."
Recent NCUA data show private student lending is up significantly on a percentage basis among the nation's federally insured credit unions, but still represents a very small portion of total loans outstanding.