ALEXANDRIA, Va.–NCUA is reminding credit unions of an upcoming date in which changed field of membership rules go into effect for federal credit unions, and urging them to recognize a new definition of a service area will be going into effect.
In its Letter to Credit Unions, NCUA noted effective Oct. 14 federal credit unions seeking a community charter may use a “Combined Statistical Area” (CSA) or portions of that areas defined in federal rules as the basis for defining their proposed service area without documenting how a CSA’s residents interact or share common interests.
As CUToday.info reported, in July the NCUA board adopted its final rule on field of membership that again permits FCUs to seek to serve CSA as a “well-defined” local community if that area has a population no greater than 2.5 million persons.
The rules were originally approved by NCUA in 2016 and then delayed after the banking industry filed a lawsuit. NCUA tweaked its rules in response to court rulings, with a federal appeals court upholding most of the changes it had put in place. When the Supreme Court declined to hear an appeal, the NCUA board passed its final rules.
Further Clarifications
Letter to Credit Unions (20-FCU-03) stated the final rule will further clarify for applicant credit unions that they must provide the agency with the business rationale used to define a CSA or Core-Based Statistical Area (CBSA) “if the defined area does not include an area’s largest county or named city.”
“Applicants should outline the rationale in the submitted business and marketing plan,” the letter continues. “The new provision ensures federal credit unions avoid potentially discriminatory practices when establishing a proposed service area.”
NCUA said credit unions that had been earlier affected by the lawsuit will have their previously approved FOMs granted.