Page 9 - Contact Q1 2016 - final

Regulatory Corner
Why We Support NCUA’s Field of
Membership Expansion Proposal
By Sarah Stevenson
The Michigan Credit Union League is supporting a recent
proposal from the National Credit Union Administration
(NCUA) Board of Directors that would substantially improve
the NCUA’s field of membership (FOM) requirements for
federal credit unions.
On November 19, 2015, the NCUA board issued a proposal with
request for comment on the regulator’s Chartering and Field of
Membership manual. This document indicated that the proposed
rule would aim to ease undue burdens and restrictions on a
federally chartered credit union’s ability to provide services for
consumers who are eligible for membership—particularly those
of modest means and those who aren’t currently credit union
members. The proposal also contains measures to enhance FOM
expansion options and maximize parity between state- and
federally chartered credit unions.
The comment period for the proposal ended February 8, 2016,
and MCUL is strongly in favor of these measures, which are
supportive of NCUA’s efforts to maintain a strong dual chartering
system. While the league echoes the regulator’s calls for field of
membership expansion, the comment letter MCUL submitted to
NCUA seeks further clarification before a final rule is issued.
Recommended Changes
This proposal provides for key revisions to each federal
charter type including, but not limited to, the following:
Community Common Bond Charters
• Provide federal credit unions the ability to apply to
convert to a community charter or expand an existing
community charter without having to serve the core area
• Recognize congressional districts as a single
political jurisdiction
• Increase the population for a rural district from
250,000 to 1 million persons
Multiple Common Bond Charters
• Permit the addition of persons who work regularly for an
entity that is under contract to the sponsor of the Select
Employee Group (SEG) listed in its charter, provided there
is a “strong dependency relationship” with that sponsor
• Allow inclusion of employees of an office/industrial
park’s tenants, such as a shopping mall
• Allow a credit union’s common bond to include honorably
discharged veterans of any branch of the United States
Armed Forces listed in its charter, continuing their
eligibility for credit union membership beyond active duty
Trade, Industry or Profession (TIP) Charters
• Expand the definition of TIP to include employees of
entities that have a strong dependency relationship on,
and whose employees work directly with employees of,
other entities within the same industry
So what does this all mean for federal credit unions?
NCUA Chairman Debbie Matz said that while the Credit Union
Membership Access Act of 1998 was originally meant to facilitate
membership, it is constrictive when viewed through the lens of
today’s more progressive state laws.
“As a result, we’ve seen three times more federal credit unions
converting to state charters or merging into state charters in
order to expand their field of membership,” Matz stated.
MCUL supports NCUA’s new proposal out of a belief that our
industry needs a strong dual chartering system and that
expanding membership opportunities for federally chartered
credit unions is yet another way we can help expand the
credit union movement.
For more information, contact Sarah Stevenson, senior regulatory
and legislative affairs specialist, at Sarah.Stevenson@mcul.org.
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