NCUA modernizes service facility definition in chartering & FOM manual

The NCUA has updated its definition of a service facility with regards to shared locations. Learn what this could mean for your credit union and its members.

On November 18 of last year, the Board of the National Credit Union Administration (NCUA) issued a final rule to amend the definition of a “service facility” relating to federal multiple common bond credit unions in the Chartering and Field of Membership (FOM) Manual.

The main takeaways from the decision, which came into effect on December 27, are: 1) Shared locations are now considered service facilities regardless of whether a credit union has an ownership interest; and 2) Shared branches now meet the service facility requirement for underserved areas.

What is a Service Facility?

The definition of a service facility applies directly to the addition of both select groups and underserved areas to the FOM of a federal multiple common bond credit union.

As per the Federal Credit Union Act, a select group may be added only if the credit union is “within reasonable proximity to the location of the group whenever practicable and consistent with reasonable standards for the safe and sound operation of the credit union.” Similarly, in order to add an underserved area, the credit union must “establish and maintain an office or facility” within that area.


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