The NAFCU Journal May - June 2017 - 24

''

I don't think changes
to an organization's field of
membership contribute to
its competitiveness. But
they certainly do offer a
competitive federal credit
union the opportunity to extend
its presence and grow its
membership.

''

- BILL BIRNIE, CEO, PACIFIC MARINE CREDIT UNION

time, the NCUA must make sure any
changes comply with the Federal
Credit Union Act of 1934 and the
changes incorporated under the
Credit Union Membership Access
Act of 1998.
The NCUA's FOM rule changes expand
potential member outreach for:
Local communities, rural districts and
underserved areas.
■■ Multiple-common-bond credit unions.
■■ Trade, industry or profession (TIP)
credit unions.
■■

New mechanisms to define core service
areas will enlarge the potential field a
federal credit union can pull from to
broaden its membership, and they allow
multiple-common-bond credit unions
to include a website and mobile platform that accept deposits and facilitate
portions of loan transactions. The final
rule also makes it easier to request an
FOM expansion. It didn't, however,
expand the 2.5 million population cap
to 10 million for charter core areas as
some had hoped (though this change is
included in a current NCUA proposal;
see www.nafcu.org/fom).
Federal credit unions seeking permission to expand into an adjacent area
can provide written proof of interaction
or common interests with target residents. In the past, the NCUA recognized
24

core-based statistical areas only as
defined by the Office of Management
and Budget.

Credit unions operating in underserved
areas must still meet criteria based
on prescribed facilities ratio analyses
to determine if there is indeed a
low concentration of other financial
institutions serving the community.
However, the new rule also now accepts
the Consumer Financial Protection
Bureau's "underserved county"
designation or other alternative analytics
based on NCUA or federal banking data.
The final rule streamlines the process
for applying to expand a federal credit
union's membership and expand eligibility for honorably discharged veterans
to join a military-based federal credit
union that previously allowed only
active-duty members.
All of the NCUA updates are designed
to help credit unions compete more

Bankers sue NCUA
over FOM rule

T

he NCUA's revised
field-of-membership (FOM)
rule, approved by the NCUA Board
last October, represents the most
comprehensive update of the rule
in a decade and includes numerous provisions sought by NAFCU
and member credit unions. Now,
the rule is being challenged by
the American Bankers Association,
which claims the rule exceeds the
NCUA's statutory authority.
NAFCU President and CEO Dan
Berger, responding to that filing in
December, reiterated that NAFCU
stands behind the NCUA's decision to
issue this final rule.
"The NCUA's field of membership
rule is well within the agency's legal
authority and is in keeping with the
Federal Credit Union Act," Berger said.

Adds Carrie Hunt, NAFCU's executive
vice president of government affairs
and general counsel, "This rule is a
necessary measure that will allow
credit unions to keep pace with state
law changes as well as technology
and the progress of the financial
services industry."
The NCUA's revised FOM rule has
been in effect since just this February.
In early March, the NCUA filed its
reply brief to the lawsuit rejecting the
ABA's assertions and asking that the
court dismiss the case. The suit is in
the U.S. District Court for the District
of Columbia.
NAFCU, which is closely monitoring
this case, has published a Final Regulation on the rule for members; for
an overview of this issue, go to
www.nafcu.org/fom.

THE NAFCU JOURNAL  MAY-JUNE 2017


http://www.nafcu.org/fom http://www.nafcu.org/fom

Table of Contents for the Digital Edition of The NAFCU Journal May - June 2017

Our First 50 Years
Events Calendar
From the Chair
Inside NAFCU
The Digital Download
50 Ways to Grow Your Credit Union Professional and operational
Fields of Opportunity
2017 Annual Conference Exhibitor Directory
Getting to Know …
Management Insight
Compliance Central
Inside NAFCU Services
From the President’s Desk
The NAFCU Journal May - June 2017 - Cover1
The NAFCU Journal May - June 2017 - Cover2
The NAFCU Journal May - June 2017 - 1
The NAFCU Journal May - June 2017 - Our First 50 Years
The NAFCU Journal May - June 2017 - Events Calendar
The NAFCU Journal May - June 2017 - From the Chair
The NAFCU Journal May - June 2017 - 5
The NAFCU Journal May - June 2017 - Inside NAFCU
The NAFCU Journal May - June 2017 - 7
The NAFCU Journal May - June 2017 - 8
The NAFCU Journal May - June 2017 - 9
The NAFCU Journal May - June 2017 - 10
The NAFCU Journal May - June 2017 - 11
The NAFCU Journal May - June 2017 - 12
The NAFCU Journal May - June 2017 - 13
The NAFCU Journal May - June 2017 - The Digital Download
The NAFCU Journal May - June 2017 - 15
The NAFCU Journal May - June 2017 - 50 Ways to Grow Your Credit Union Professional and operational
The NAFCU Journal May - June 2017 - 17
The NAFCU Journal May - June 2017 - 18
The NAFCU Journal May - June 2017 - 19
The NAFCU Journal May - June 2017 - 20
The NAFCU Journal May - June 2017 - 21
The NAFCU Journal May - June 2017 - Fields of Opportunity
The NAFCU Journal May - June 2017 - 23
The NAFCU Journal May - June 2017 - 24
The NAFCU Journal May - June 2017 - 25
The NAFCU Journal May - June 2017 - 26
The NAFCU Journal May - June 2017 - 27
The NAFCU Journal May - June 2017 - 28
The NAFCU Journal May - June 2017 - 2017 Annual Conference Exhibitor Directory
The NAFCU Journal May - June 2017 - 30
The NAFCU Journal May - June 2017 - 31
The NAFCU Journal May - June 2017 - 32
The NAFCU Journal May - June 2017 - 33
The NAFCU Journal May - June 2017 - 34
The NAFCU Journal May - June 2017 - 35
The NAFCU Journal May - June 2017 - 36
The NAFCU Journal May - June 2017 - 37
The NAFCU Journal May - June 2017 - 38
The NAFCU Journal May - June 2017 - 39
The NAFCU Journal May - June 2017 - 40
The NAFCU Journal May - June 2017 - 41
The NAFCU Journal May - June 2017 - 42
The NAFCU Journal May - June 2017 - 43
The NAFCU Journal May - June 2017 - Getting to Know …
The NAFCU Journal May - June 2017 - 45
The NAFCU Journal May - June 2017 - Management Insight
The NAFCU Journal May - June 2017 - 47
The NAFCU Journal May - June 2017 - Compliance Central
The NAFCU Journal May - June 2017 - 49
The NAFCU Journal May - June 2017 - Inside NAFCU Services
The NAFCU Journal May - June 2017 - 51
The NAFCU Journal May - June 2017 - From the President’s Desk
The NAFCU Journal May - June 2017 - Cover3
The NAFCU Journal May - June 2017 - Cover4
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