ARLINGTON, Va.–What will the nation’s banking industry make of the likely passage on Thursday by the NCUA board of a proposal that would alter the definition of “service facility” and allow credit unions to expand their fields of membership without adding bricks and mortar? They’ll respond in the same way the banking industry always does, according to one NAFCU exec.
As CUToday.info has reported, on Thursday the NCUA board will vote on a proposal that would allow CUs to include any shared branch, shared ATM, or shared electronic facility in the definition of “service facility” for a multiple common-bond federal credit union that participates in a shared branching network.
At the heart of the issue is the concept of “reasonable proximity,” in which NCUA has traditionally required a credit union to have a physical facility within 25 miles of an underserved market to make it eligible for its field of membership.
What Will It Mean?
Will the passage of the new rule make it more difficult for credit unions on Capitol Hill?
“The bankers are going to criticize credit unions no matter what,” said NAFCU VP-Legislative Affairs Brad Thaler. “We have seen legislation on Capitol Hill in support of more credit unions serving more people. I think people recognize the important role credit unions are playing, even before the pandemic. During the government shutdown, credit unions stepped in. During the pandemic, credit unions stepped in. You’re seeing that recognized in legislative proposals and even in some of the relief effort focused on getting money to community institutions.
“So, if the banks weren’t attacking credit unions on this they would be attacking on something else,” Thaler said