WASHINGTON—CUNA Wednesday sent a letter to Congress addressing the American Bankers Association’s and Independent Community Bankers Association’s opposition to NCUA’s proposed changes to its field of membership rules.
CUNA stated it sent the correspondence to “combat factually incorrect attacks from bankers” that were recently sent to Congress in a letter from the ABA and ICBA. In CUNA’s letter, President and CEO Jim Nussle “corrected erroneous information” put forth by the bankers and expressed dismay at the reasoning behind it.
“The loose analysis of NCUA’s field of membership proposal articulated by the bankers’ letter is as disappointing as it is inaccurate,” wrote Nussle. “Here are the facts: Nothing in the proposal would allow credit unions to expand their fields of membership in an ‘unchecked’ manner. If this proposal is adopted, federal credit unions will still face limits on whom they may serve under the Federal Credit Union Act. To be a member of a credit union, a consumer has to fall into a credit union’s FOM. Generally, a FOM is defined by an employee relationship, a relationship with a close association of people that share a common bond, or a community. The concept of credit union field of membership predates the establishment of federal credit unions. In fact, the earliest state chartered credit unions used field of membership as a creditworthiness tool. Although archaic, the concept remains a part of the Federal statute.”
Nussle added that the NCUA FOM proposal takes steps to “relieve credit unions of regulatory burden and expand access to credit unions, but Congress should take similar steps as well. Previous proposals in Congress would expand the ability of all credit unions to add underserved areas to their field of membership. We have supported these bills, but also believe that in a day and age in which there are far more sophisticated tools to determine a borrower’s creditworthiness, restrictive membership requirements may no longer be necessary.”
Last week NAFCU President and CEO Dan Berger sent a letter to Congress on the same matter, stating the trade association is “disappointed that the ABA and ICBA have chosen to attack efforts at regulatory relief for credit unions and their 101-million members. Perhaps the banking trade associations should have paid this much attention to their own members and actions prior to the financial crisis. If so, maybe their members would not have been the main users of TARP bailout funds and had over $100 billion in fines, settlements and buy-backs stemming from the financial crisis.
Bankers have also sent more than 500 bankers' letters to NCUA during the FOM rule’s comment period.