NCUA finalizes nonmember deposit rule, issues FOM proposal

October 24, 2019

The NCUA Board Thursday finalized a nonmember deposits rule, proposed field of membership changes to align with the recent victory in the D.C. Circuit Court of Appeals, and received a briefing on cybersecurity. Representatives from the Heartland Credit Union Association and member credit unions were in attendance at the meeting, being acknowledged by NCUA Chairman Rodney Hood.

The final nonmember deposit rule allows credit unions to receive public unit and nonmember shares up to 50% of the credit union’s net amount of paid-in and unimpaired capital and surplus less any public unit and nonmember shares. The final rule also retains the $3 million alternative limit, language that was not in the proposed version.

“We thank NCUA for retaining the $3 million alternative cap in its final public unit and nonmember shares rule,” said Elizabeth Eurgubian, CUNA’s deputy chief advocacy officer. “As stated in our comment letter to the agency, we believe that removing the alternative limit could have harmed several credit unions that currently use the $3 million alternative cap, mostly small institutions, so this is a welcome change for them.”

The final rule will be effective 90 days after it is published in the Federal Register.

The board also issued a proposal to re-adopt a provision to allow an applicant to designate a Combined Statistical Area as a well-defined local community (WDLC), provided that the chosen area has a population of 2.5 million or less.

It also provides further explanation and support for the elimination of the requirement to serve the CBSA’s core area, as provided for in the 2016 final rule. This is consistent with the DC Circuit Court of Appeals opinion in August regarding communities based on a Core-Based Statistical Area.

“Today’s proposal is consistent with Chairman Hood’s stated approach to implementing the D.C. Circuit Court of Appeal’s ruling, and we thank the agency for moving quickly to address this issue,” Eurgubian said. “We have long supported NCUA using the authority granted by Congress to ensure credit unions are able to serve members throughout the country, and look forward to sharing our feedback with NCUA.”

The meeting concluded with a briefing from NCUA Cybersecurity Advisor Johnny Davis, who discussed the state of cybersecurity in the credit union industry.

It also outlined Hood’s cybersecurity policies:

  • Advancing consistency, transparency and accountability within the cybersecurity examination program;
  • Stimulating due diligence for Supply Chain and Third-Party Service Provider management within the credit union subsector;
  • Assisting institutions with resources to improve operational hygiene and resilience; and
  • Ensure NCUA’s systems and collected, controlled, unclassified information are secure.

Questions about the meeting and its results can be directed to CUNA Senior Director of Advocacy and Counsel Luke Martone at