WASHINGTON—Both CUNA and NAFCU have lodged their support for NCUA’s second proposed field-of-membership rule, filing comment letters Thursday.
The NCUA released its proposed FOM rule during its October board meeting after finalizing a modernization of the FOM rule. The proposed rule would reintroduce the narrative approach for establishing well-defined local communities; raise the population cap from 2.5 million to 10 million for core based statistical areas (CBSA) and combined statistical areas (CSA); and permit credit unions to serve portions of a CBSA without regard to metropolitan division borders.
In NAFCU’s letter, President and CEO Dan Berger noted that the increased population cap and the narrative approach for defining well-defined local communities will “grant immediate relief to community charter credit unions.” He added that that this proposed rule falls well within the agency’s legal purview.
“NAFCU believes that the board is operating within the guidelines of the [Federal Credit Union] Act to facilitate consumer access to credit unions and to enhance their delivery of services and upholds the Act’s objectives,” Berger wrote. “This proposed rule would provide relief from undue burdens and restrictions on a FCU’s ability to provide services to consumers who are eligible for FCU membership.”
In its comment letter, CUNA concurred.
“CUNA believes, based on a review of the major provisions of the proposal, that it falls well within the agency’s statutory authority. Congress has delegated the authority to the NCUA to interpret the Federal Credit Union Act in this matter, has properly exercised its authority to make the regulation and has reasonably interpreted the Federal Credit Union Act in putting the proposal forth,” CUNA said.
CUNA also stated that the trade association appreciates the agency “adopting CUNA’s suggestions that will help credit unions serve more Americans, whose access to consumer-friendly and affordable financial services should not be limited by outdated regulations adopted when financial services were delivered differently.”
Among NAFCU’s recommendations to enhance the proposal include:
- Provide more clarity to the narrative approach criteria within the proposal, for example, whether the criteria will receive similar weight under a totality of the circumstances test and if credit unions will have an opportunity to request a formal explanation of any deficiencies in a rejected application.
- Allow credit unions to demonstrate the existence of a well-defined local community by identifying shared commonalities over web-based mediums, such as shopping, local television and radio stations, and entertainment and sporting events.
- Reconsider the use of a population cap and instead look to common commutes, shared interaction and other factors included in a CSA and CBSA for the purpose of determining a credit union’s capacity to serve its local community.
- Adopt a 30-day time limit for either approving or denying an FOM amendment request. For all FOM amendments more than 1 million members that need NCUA Board approval, NAFCU recommends that the agency adopt a 60-day time limit.
- Increase transparency in the decision-making process for reviewing a FOM-related application, streamline charter conversions and notification requirements.