WASHINGTON (6/16/15)--CUNA is seeking changes to field-of-membership (FOM) rules that the National Credit Union Administration could address if it is prepared to take an innovative approach to the agency’s current statutory authority.
The changes could go far to modernize the agency’s current rules and would reflect how modern Americans live, work and play and define their common interests, said CUNA.
“NCUA should not allow the past to become a barrier or an excuse [not] to more aggressively pursue FOM expansion. Boldness will reward credit unions with new opportunities to expand services to new areas and ensure that the federal charter remains strong,” said CUNA in a letter to the NCUA. “There are no safety and soundness concerns from innovating on these requirements, only the fear of criticism from competitors who would be happy to see credit unions fail in any case.”
NCUA Chair Debbie Matz has said it is on her 2015 regulatory relief agenda to look at making it easier for credit unions to alter fields of membership. NCUA Vice Chair Rick Metsger has urged credit unions to engage in the discussion.
CUNA’s recommendations take three approaches: proposals within NCUA’s immediate authority to implement, proposals allowable under current statutes that would require a change to current rules, and changes that would require congressional action.
CUNA’s proposals within NCUA’s immediate authority to simplify the FOM process include asking the agency to:
Several proposals would require rule changes, but would be allowed under the Federal Credit Union (FCU) Act. CUNA noted that NCUA should address these issues:
CUNA also proposed two changes related to a common bond and multiple occupational/associational common bond:
Two changes relate to charter conversions:
For low-income credit unions (LICUs), CUNA supports expanding the definition of LICU to allow more than one way to meet the LICU certification. The change would allow credit unions to self-designate as low income and make community development financial institutions (CDFI) automatically considered as LICUs.
CUNA also outlined proposals likely requiring congressional action:
CUNA suggested greater flexibility in or eliminating facilities requirements for credit unions serving underserved areas. NCUA could provide a national standard ratio of depository institutions per person as an optional benchmark for determining an underserved area or provide alternative methods to evaluate whether an area is underserved. Credit unions are unable to add underserved areas to their FOM because of the facilities requirement. NCUA requires them to establish an office or facility in the underserved community within two years.
CUNA’s comments are in response to NCUA’s request for comments about FOM changes.