It’s time to eliminate field-of-membership requirements
Yesterday’s Supreme Court decision upholding the National Credit Union Administration’s field-of-membership rule puts to rest a nearly four-year saga in which bankers fought tooth and nail to prevent consumers from having expanded options to meet their financial services needs. This decision is a win for consumers and a great moment for the credit union movement.
Affirmation of the rule allows credit unions to expand access to not-for-profit, cooperative financial services that seek to enrich consumers’ financial well-being. The decision also reaffirms that credit union field of membership stands distinct from the industry’s mission and structure.
The Federal Credit Union Act makes that mission very clear: “promote thrift and provide access to credit for provident purposes.” As for credit unions’ structure, they have been — and always will be — not-for-profit financial cooperatives, which means credit union members are also owners; it’s the very root of our people-helping-people philosophy.
As a concept, field of membership is nearly as old as the credit union mission and structure, but it’s never been a part of either. Instead, it was established as a credit-worthiness tool at a time when modern and sophisticated tools like credit reports and credit scores did not exist. When all the members of a credit union worked together or lived in the same neighborhood, members had more confidence lending to each other because they knew each other.
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