ARLINGTON, Va.–NCUA continues to encourage credit unions to take full advantage of its field of membership rules, a move being welcomed by NAFCU.
In the last week the agency has released two Letters to Credit Unions related to field of membership, the first on its Chartering and Field of Membership Manual, and the second reminding that any federal credit union with a multiple common bond field of membership may include in its field of membership, without regard to location, underserved communities as defined by the Federal Credit Union Act, as CUToday.info reported here.
“I think the agency is making sure credit unions have all the tools at their disposal, especially to serve the underserved,” said NAFCU’s EVP and general counsel, Carrie Hunt. “They have done a lot in recent years.”
Hunt cited the field of membership rules NCUA has previously approved that led to litigation by the banking industry, which challenged the expansions. The courts generally ruled in favor of NCUA on nearly every point.
“NCUA is continuing down that road,” said Hunt. “We view it as being very positive.”
The Core Question
Hunt said the core question is always, “Does the Federal Credit Union Act” allow for the expansions? NAFCU’s position, she said, has always been to support a “very permissive” interpretation of the FCU Act.
But what about the concept of field of membership itself, a core component of the original organization of credit unions? Has it become obsolete?
Hunt said there are two ways to look at those questions. She said many of the rules have become antiquated and need to change, as they have “hamstrung” many CUs. On the other hand, many federal credit unions have been very successful operating under the current FOM framework. Overall, she added, there continue to be lots of “small bites of the apple” when it comes to field of membership rules.
This Week’s Agenda
Meanwhile, while field of membership isn’t one of the items up for consideration, the NCUA board will meet on Thursday with a packed agenda.
Hunt said NAFCU believes the issue of “utmost importance” on that agenda is an advance notice of proposed rulemaking, Part 702, simplification of risk-based capital requirements, which the trade group has supported.
The meeting is likely the last at which Rodney Hood will be NCUA chairman; President-Elect Biden is expected to elevate Board Member (and Democrat) Todd Harper to chairman as soon as he is sworn in next week. As chairman, Harper would control the agenda for the board meetings, but he would also be in the minority, as both Hood and Board Member Kyle Hauptman are Republican-appointees.
Also on the agenda for this week’s meeting:
- Board briefing, ACCESS Initiative
- Proposed rule, Part 712, Credit Union Service Organizations
- Board briefing, final rule, Part 747, statutory inflation adjustment of civil monetary penalties
- Final rule, Part 704, corporate credit unions
- Notice of proposed rulemaking, Parts 700, 701, 703, 704 and 713, CAMELS rating system
- NCUA’s 2021 Annual Performance Plan