ALEXANDRIA, Va.– NCUA Vice Chairman Rick Metsger told a gathering of credit unions that he believes federal credit unions could benefit from changes in regulations and in law to give them greater flexibility in defining their fields of membership.
“I’ve been concerned with field-of-membership issues for some time,” Metsger said in remarks before the Northern Virginia Chapter of Virginia CU League, “and this is an area I believe can be improved both in regulation and in law. We can modernize our rules, and Congress could update the Federal Credit Union Act, to help federal credit unions grow and serve more Americans, especially those of modest means, who do not have adequate access to an affordable, insured financial institution.”
Metsger outlined for the meeting a number of changes that would streamline the agency’s regulations and expand access to credit union services for American families, including:
- Allowing credit unions converting from single or multiple common bonds to community charters to continue serving select employer groups even if they are located outside the new community charter boundaries.
- Permitting the addition of adjacent areas to community charters without requiring them to be Core-Based Statistical Area.
- Eliminating the requirement that a community charter be based on a core area of a Core-Based Statistical Area.
- Revising and simplifying the process for determining that an area is “underserved.”
- Allowing active-duty military personnel and their families to automatically qualify as low-income households.
How Legislators Could Help
Metsger NCUA has already testified before Congress and called for statutory changes to modify the Federal Credit Union Act to give the agency authority to streamline field-of-membership regulations and permit credit unions to better serve underserved communities.
“Law and regulation should, to a practical extent, reflect the situation on the ground and respond to change,” Metsger said. “Enacting statutory changes will not be easy, and it will require all of us, the regulator and the regulated, to overcome the current situation.”
Among the statutory changes Metsger is recommending:
- Allowing all credit unions, not just multiple common-bond charters, to add underserved areas.
- Simplify the “facilities” test for determining if an area is underserved.
- Giving community-based federal credit unions the option to structure their fields of membership in accordance with law of the state in which they operate.