Credit union organizations are praising the National Credit Union Administration for approving new rule changes designed to modernize its field-of-membership regulations. These changes to the rules are included in our credit union training courses.
Under the final rule approved by the NCUA board Oct. 27, more Americans will become eligible for credit union products and services. The final rule will become effective 60 days after publication in the Federal Register.
“This comprehensive rule expands consumer access to credit and provides them a safe place to invest their life savings,” NCUA Board Chairman Rick Metsger said in a news release. “Congress passed the Federal Credit Union Act and the Credit Union Membership Access Act to improve access for consumers to a national system of not-for-profit cooperative credit. But, the world has changed since we last put in place rules to implement these laws. We cannot anchor our regulations to the past; we have to keep pace with how consumers access financial services today.”
“These changes will expand access to affordable financial services for consumers, including those in underserved communities,” NCUA Board Member J. Mark McWatters added in the release.
According to the release, among the changes in the final rule include:
• Allowing greater flexibility to community charter credit unions in how they define the local communities they serve;
• Providing credit unions with better opportunities to serve underserved areas by updating the process for defining those areas;
• Enhancing access to credit union services for residents of rural areas by allowing rural district credit unions to serve up to 1 million people;
• Streamlining paperwork for multiple common-bond credit unions that seek to serve additional groups, such as including independent contractors with a strong dependency relationship with an employee group; and
• Expanding credit union access for honorably discharged members of the armed services by allowing them to join credit unions serving their active-duty counterparts.
Meanwhile, the NCUA is considering other proposed changes to its membership rules, including raising the population limit for a field of membership from 2.5 million people to 10 million. Comments on the proposed changes must be received within 30 days of publication in the Federal Register.
“This will facilitate consumer and small business access to credit unions and make it easier for credit unions to serve their members,” CUNA President/CEO Jim Nussle said in an Oct. 27 news release posted on the CUNA website. “We commend NCUA for the inclusive and transparent process it undertook and for listening to stakeholder comments aimed at improving the final rule.”
NAFCU President and CEO Dan Berger praised the NCUA for “making final the most comprehensive field-of-membership reform initiative that the credit union industry has seen in more than 10 years.”
However, the American Bankers Association voiced concerns about the changes in a Oct. 27 statement following the board’s vote.
“We’re deeply concerned about NCUA’s decision to go beyond its statutory authority to move credit unions even further away from the common bonds that define their missions,” ABA President and CEO Rob Nichols said in the statement about Credit Union Certification. “By passing today’s field of membership rule, NCUA ignores two congressionally mandated limits on credit union membership —’well-defined’ and ‘local’ — in a move that would dramatically expand the scope of the credit union tax subsidy. We’re closely reviewing the rule and will take any action necessary to protect the interests of taxpayers, small banks and the communities they serve.”
To read more about the NCUA’s final rule and proposed changes, click here.