ALEXANDRIA, Va.—In response to the NCUA's proposed rule to modernize the definition of a "service facility" for multiple common bond (MCB) federal credit unions, NAFCU has sent a comment letter stating its support but also offering changes it would like to see.
"NAFCU and our members have long advocated for NCUA to modernize the Manual in recognition of the advent of technology and its impact on commerce and consumer behavior," wrote Senior Regulatory Counsel Elizabeth LaBerge in a comment letter to the agency. "The proposed rule would define 'service facility' in a manner that provides clarity, consistency, and the appropriate recognition of technological advances and the current operation of shared branching."
As proposed, the rule would include any credit union ATM or a shared branch, shared ATM, or shared electronic facility in the definition of “service facility” – regardless of whether the FCU is an owner of the shared branch network.
NCUA put the proposal out for comment at its most recent board meeting. The measure was opposed by then Board Member Todd Harper, who has since been elevated to chairman by the Biden administration. At the time Harper said the proposal “could render the Federal Credit Union Act requirement a near nullity.”
Long-Time Support
In its letter, NAFCU said it has long been supportive of efforts to modernize rules relating to field of membership and has highlighted the need for credit unions to be able to access relief and tools to reach underserved communities.
"Field of membership is an important part of what makes credit unions unique, but it should not be used as a stricture against healthy credit union growth and improving access to credit unions for underserved communities," stated LaBerge. "Without regulatory and legislative relief, NAFCU and our members are concerned that credit unions will be unnecessarily and unjustifiably obstructed in their ability to invest in appropriate technology and perform in the consumer finance sector, which is increasingly competitive and innovative."
Other Issues Addressed
NAFCU’s comment letter also addresses issues related to:
- A variance in definition of a service facility regarding underserved areas found in the manual
- Revisions of the definition to include "facilities that are accessible to groups within the FOM through online services"
- Improving access to credit union products and services for underserved communities
LaBerge also spoke to what NAFCU said is the importance of recognizing online and mobile banking citing the societal shift in how products and services are available to consumers and urges the NCUA to "meaningfully incentivize and facilitate" credit union investment in these technologies.
‘A Changed World’
"The NCUA must recognize and reckon with this changed world and ensure that federal credit unions and the consumers they would like to serve are not penalized for investing credit union capital in these technologies that are necessary for the survival and growth of credit unions rather than investing that capital in unnecessary and rarely visited physical branches," added LaBerge.
Additionally, LaBerge asked the NCUA to extend flexibilities to MCB credit unions that would allow the credit union to "provide narrative evidence of the anticipated symbiosis between the select group and the credit union." For example, establishing anticipated needs for financial products and services and the credit union's ability to serve them.