National Association of Federal Credit Unions (NAFCU) President and CEO Dan Berger, in an official comment letter, today commended NCUA for its leadership in proposing to improve its measures setting field-of-membership limitations, action that will help more consumers gain access to credit union services.
“NAFCU applauds NCUA Board Chairman Rick Metsger and Board Member J. Mark McWatters for proposing additional modifications to the field-of-membership rule, which will provide even more opportunities for consumers to find a credit union that meets their financial needs,” said Berger. “As demonstrated during the financial crisis, credit unions have a proven track record of providing credit and high-quality financial services to their members during their times of need, especially when banks and others turned them away. NCUA’s proposal will benefit consumers searching for a better option in the financial services market to find a local credit union.”
Among other things, the proposed rule would increase population caps and provide additional options for credit unions to include certain geographical areas within their fields of membership. “As the prudential regulator of not-for-profit, member-owned cooperatives, NCUA is acting well within its statutory authority. This proposed rule is merely providing relief from undue burdens and restrictions on credit unions’ ability to provide services to consumers who are eligible for membership, and it will better benefit the country’s 106 million credit union members,” said Berger.
The board’s field-of-membership proposal contains several NAFCU-sought changes. The first is to allow credit unions seeking approval to form, expand or convert to a community charter the option to submit a narrative as to why a particular area meets their field of membership. The second is to increase to 10 million the population limit on a well-defined local community. The third objective is to permit a credit union to designate an individual portion of a core-based statistical area as its community no matter the metropolitan division boundaries within the area.
Berger, in NAFCU’s official comment letter on the proposed rule, highlighted several recommendations to enhance the proposal, including, among others:
- Provide more clarity to the narrative approach criteria within the proposal, for example, to show whether the criteria will receive similar weight under a totality of the circumstances test and if credit unions will have an opportunity to request a formal explanation of any deficiencies in a rejected application.
- Allow credit unions to demonstrate the existence of a well-defined local community by identifying shared commonalities over web-based mediums, such as shopping, local television and radio stations, and entertainment and sporting events.
- Reconsider the use of a population cap and instead look to common commutes, shared interaction and other factors included in a CSA and CBSA for the purpose of determining a credit union’s capacity to serve its local community.
- Adopt a 30-day time limit for approving or denying an FOM amendment request. For all FOM amendments more than 1 million members that need NCUA Board approval, NAFCU recommends that the agency adopt a 60-day time limit.
Increase transparency in the decision-making process for reviewing a FOM-related application, streamline charter conversions and notification requirements.