NCUA Board Approves Final Rule on Field of Membership

The National Credit Union Administration (NCUA) voted today to finalize a second field of membership rule, giving credit unions the option to submit a narrative application for a well-defined local community rather than being limited to a presumptive statistical community.

For narrative applications where the proposed community exceeds a population of 2.5 million, the NCUA Board will hold a public hearing and make decisions on a case-by-case basis. For communities that are subdivided into metropolitan divisions, the Board will permit a credit union to designate a portion of the area as its community without regard to division boundaries.

“Today’s final rule will give individual credit unions greater flexibility to establish their own well-defined local communities rather than having someone else impose their definition on them,” said NCUA Board Member Rick Metsger. “It will not please everyone. Banks may think it goes too far, and credit unions may think it doesn’t go far enough. But it is a logical next step, which is consistent with both the Federal Credit Union Act and judicial interpretations of that act.”

The NCUA Board allowed a narrative approach prior to 2010. The same 13 criteria used at that time to identify a well-defined local community is offered as guidance to applicants.

“The rule gives credit unions the opportunity to offer more consumers access to affordable financial services,” said John Bratsakis, MD|DC Credit Union Association President/CEO.

The American Bankers Association filed a legal challenge to the last changes to the field of membership rule. Provisions of that rule were vacated by a federal District Court, but other provisions were upheld. The banking industry has vigorously objected to the rule approved today.

Read the final rule here