By Ray Birch
ALEXANDRIA, Va.—NCUA’s field of membership proposal has drawn more than 5,000 comments as of Friday evening, already shattering the previous record high of 3,100 comments for the Member Business Lending rule last year.
The comment period for the FOM rule closes tonight, and as was the case with MBL, a sizeable number of banker letters are included in the entries. According to NCUA, banker entries accounted for about one third of the FOM comments by Friday.
Sources indicated that CUNA may have rallied credit unions last week to submit even more comments. CUNA’s Chief Advocacy Officer Ryan Donovan said the trade association’s read of FOM comment submissions is that the letters have always been more than two to one in favor of the proposal.
“We always expected a strong banker response,” Donovan said. “We have been encouraging credit unions to submit comment letters, and we are pleased that many are responding. This is a critical issue for consumer and small business access to credit unions. We fully support the proposal and it is good news that others are responding in significant number.”
NAFCU has been rallying CU support for the proposal, as well.
Banker Opposition Strong
Banker opposition to the FOM proposal has been strong from the outset, with the American Bankers Association sending a letter to NCUA Chairman Debbie Matz opposing any easing of CU FOM restrictions one day before the FOM proposal was voted on at the November open board meeting.
(Bankers Protest NCUA Decision On FOM Even Before Vote Occurs As…)
Since then, bankers have attacked the FOM rule on several fronts, including sending a letter in January from the ABA and the Independent Community Bankers of America to Congress. In the letter the bankers claim NCUA’s new rule would allow credit unions to expand their fields of membership in an “unchecked” manner.
CUNA and NAFCU responded with their own letters to Congress refuting the bankers’ letter, saying statements by the ABA and ICBA are inaccurate.
In comments sent to NCUA, David Nicholson, SVP of commercial lending at Marlborough Savings Bank in Massachusetts, contends that NCUA’s proposal will lead to an “outrageous expansion of credit unions …” and the “unnecessary nationalization of yet another industry…I would very much like to hear a reason that makes sense for such an increase in the credit unions’ reach.”
Like many opposing the FOM rule, Stacy Meiser, a banker from Colorado, addressed the CU tax exemption in her comments.
“My bank serves customers and the surrounding community, and unfair competition from the
credit union industry impacts my business,” she said. “Banks are not tax exempt, but are for-profit businesses attempting to balance offering products and services to best serve customers while growing the business to offer more lines of credit and other economic capital to communities.”
Ryan Donovan, CUNA
But, as with the MBL rule, form letters appear to be comprising a significant percentage of the banker letters, following a CUToday.info review of a number of the comments. And this time several of the form letters CUToday.info reviewed indicated that bankers may not be playing close attention to the issues, doing little more than adding their name to the letter without removing the form letter’s direction, such as: “[INCLUDE AN EXAMPLE OF A CREDIT UNION FIELD OF MEMBERSHIP THAT GOES BEYOND THE TRADITIONAL DEFINITION OF LOCAL – FOR EXAMPLE, AN ENTIRE STATE BEING GRANTED MEMBERSHIP].” Click here for an example.
Members Speaking
Credit unions appear to be letting their members do most of the talking this comment period, with a low percentage of letters coming from individual credit unions as compared with member letters, according to CUToday.info’s review.
CU member Edward Antoniewicz Jr., from Marshfield, Wis., wrote that he is a “hard-working American, I appreciate the ability to park my money in the financial institution I deem most appropriate. Therefore, I support the changes contemplated by the National Credit Union Administration that are intended to ensure consumers have adequate choice when determining which credit union to become a member of.”
Jim Collins, a CU member from Savannah, Ga., wrote that he appreciates the fact that his “credit union was there for folks like me during the financial crisis. I understand that not everyone can join a credit union because of strict membership rules imposed by your agency. I fully support changes to these rules that allow more people in my community to join my credit union.”
Michael Hoffman, CEO at Meridia Community FCU in Hamburg, N.Y., pointed out that as technology enables credit unions to provide services “without the use of physical facilities, NCUA must allow credit unions to demonstrate their ability to serve communities with technology that facilitates online banking. Increasingly, there are members who don’t even go into a branch, but under the existing regulations, credit unions must still demonstrate how these members have access to brick- and-mortar branches."