The NAFCU Journal May - June 2017 - 26

''

We believe credit union
membership is still one of the
best-kept secrets, and a secret
that should be told.

''

- JEFF JORGENSEN, PRESIDENT, SIOUX EMPIRE FEDERAL
CREDIT UNION

effectively in the financial services
market and make use of technologies
that make it easier for members to access
credit union resources.
"We believe credit union membership
is still one of the best-kept secrets, and
a secret that should be told," Sioux
Empire's Jorgensen says. "Bringing an
alternative financial service, specifically
a member-owned cooperative financial
alternative, to thousands of new persons
seems a logical extension of our credit
union mission."

Thumbs Up ... and Thumbs
Down

The NCUA first introduced plans to
update the FOM rule in late 2015. The
modifications were needed, it said, to
allow greater consumer access to credit
unions and relieve "undue burdens and
restrictions" so federal credit unions
could strategically expand.

Today, approximately 40 percent of Pacific
Marine's 80,000-plus total membership is
the result of that FOM expansion.

survival and provide more regulatory
relief. He noted that the NCUA also
needed a less cumbersome process for
filing FOM expansion requests, which
could take up to 18 months to receive
NCUA approval or denial.

Birnie sees the new FOM rule as a good
thing for federal credit unions, which
can now focus more on growing membership instead of "getting bogged down
in an administrative mire," thanks to a
more streamlined approval process.

The banking industry - no fan of credit
union competition - was vocal last year
in its opposition to the NCUA proposed
rule, and the American Bankers Association (ABA) has now initiated litigation
challenging the NCUA's authority to
issue it. NAFCU is standing firm in its
support of the NCUA, which had just
filed its reply brief as of press time.

Competing for Members

Flexibility and Fine Print

The ABA's objections aside, the rule
could give some credit unions the tools
they need to remain relevant within a
consolidating financial industry.

Over the next year, regulators received
some 11,380 comments on the proposed
rule, with supporters outweighing opponents about 3 to 1. Almost all feedback
came in written form, including letters
such as that submitted by NAFCU President and CEO Dan Berger.

"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," says Bill Birnie, CEO of the
$763.3-million Pacific Marine Credit
Union, based in Oceanside, Calif.

"NAFCU believes that regulatory
changes are pivotal for a credit union's
survival in today's ever-evolving financial
sector, and are crucial to a credit union's
ability to reach the modern consumer,"
Berger wrote in February 2016.

Pacific Marine Credit Union isn't
impacted by the new rule because it's no
longer federally chartered, but it does
demonstrate what has happened to credit
unions that felt hamstrung by the previous FOM rule.

In that letter, Berger urged the NCUA
to consider even more changes to both
ensure federal credit unions' future

"We converted to a state charter in 2002
as a result of restrictive FOM regulations
and an unnecessarily burdensome

26

application process," Birnie says. "Our
previous FOM was restricted to four
military installations, and BRAC
[the Base Realignment and Closure
Commission] threatened that core FOM.
This conversion allowed us to expand
our FOM to include three Southern
California counties."

How credit unions intend to incorporate
the new FOM rule into strategic plans is
still unclear. That's because federal credit
unions either don't want to tip their hand
by discussing specifics, or they are still
processing what the rule means for them.
"I think we should always be considering
membership expansion," Vermillion FCU's
Mount says. "Credit unions are a great
place, and the more areas we can expand
to, the better it will be for the current and
new member, as well as the credit union."
Mount says her credit union doesn't have
any specific plans yet, "but the opportunity the new rule brings may open a
door in the future."
Sioux Empire FCU's Jorgenson, on the
other hand, is ready to widen that door.
"Whenever people can band together
for a positive common goal, it is a
win-win," he says. "Introducing the
value proposition of a member-owned
cooperative financial institution to new
audiences improves the lives of not
only those potential members, but the
financial strength and long-term viability of our business itself and, thereby,
all our members."
Anne Saita is a business and technology
writer based in San Diego.
THE NAFCU JOURNAL MAY-JUNE 2017



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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