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NCUA Board Unanimously Approves Proposed FOM Regulatory Relief

Fri, Nov 20, 2015

Columbia, Maryland

NCUA Board Meeting November 2015MD|DC Credit Union Association’s Vice President of Advocacy & Public Affairs, Glen Cooney, was on hand for the NCUA’s Board meeting yesterday where it took action on a number of highly anticipated items, including Field of Membership. Chairman Debbie Matz, Vice Chair Rick Metsger and Board Member J. Mark McWatters voted unanimously to put out for comment proposed Field of Membership (FOM) regulations that would give federally chartered credit unions the ability to expand their membership in a number of significant ways.

This is an issue that MD|DC CUA member credit unions have addressed with the NCUA Board. During the CEO Roundtable at NCUA last month, member credit unions had the opportunity to further discuss proposed FOM reform with Chairman Debbie Matz and Vice Chair Rick Metsger. In his prepared remarks, Vice Chair Metsger thanked Marsha King, CEO of the Library of Congress Federal Credit Union, for bringing to his attention the issue of longtime contractors currently being excluded from membership.

While MD|DC CUA will review the proposed FOM rules in more detail, some of the rule changes include:

  • “Core area” service requirement- under the proposal FCUs will be able to apply to convert to a community charter or expand an existing community charter without having to serve the core area if electing to serve a portion of a Core Based Statistical Area. This will allow a federal credit union to grow at an appropriate scale consistent with its ability to serve a larger area. NCUA will have an active review process on how the credit union is actually serving the requested area.
  • The 2.5 million population limit will now be applied to a well-defined portion of a metropolitan statistical area; it will no longer simply be a ceiling.  Combined statistical areas as designated by the Office of Management and Budget, such as Baltimore and Washington or Oakland and San Francisco, will also be able to be served. 
  • FCUs will be able to apply to serve an outside area contiguous to its existing Core Based Statistical Area or single political jurisdiction using a written narrative to demonstrate interaction or common interests.
  • Under the proposal, NCUA would recognize an individual Congressional district as a Well-Defined Local Community (WDLC) and permit a federal credit union to serve an area consisting of the geographic boundaries of an individual Congressional district.
  • Allow the rural district population to be comprised of up to 1 million residents from the current standard of 250,000 (or 3% of a state’s population).
  • Regarding underserved areas, NCUA will exclude non-depository institutions and non-community credit unions when calculating the “Concentration of Facilities” ratio. NCUA will also rely on other federal data to determine whether an area is underserved.   
  • The definition of a TIP (trade, industry, professional) charter expanded to include employees of entities that have a strong dependency relationship with employees who work directly with employees of other entities with the same industry.
  • Regarding multiple common bond credit unions, the “reasonable proximity” requirement is relaxed to include a website or mobile platform that will be defined as a service facility.
  • SEG contractors will be eligible for membership in a multiple common bond credit union. Tenants in office and industrial parks will also be eligible. 
  • Streamline the paperwork and process to allow credit unions to add groups with up to 5,0000 potential members to be added to multiple common bond federal credit union. The current rules limit these groups to 3,000. 

Comments on the proposed rule, available online here, must be received within 60 days of publication in the Federal Register. Glen Cooney will be working to draft comment letters. He can be contacted at: As expected, the banking industry has strenuously objected to the proposed FOM rule change, particularly the Congressional district provision, and the new reasonable proximity definition.

Other actions taken by the NCUA Board:

  • Approval of a 2-Year Budget with a 2-1 vote. As expected, Board Member McWatters cast the dissenting vote. McWatters has previously raised objections to a 2-year budget and called for increased agency transparency on the budget process.
  • Approval of the 2016-2017 Annual Performance Plan to establish NCUA’s goals for the coming year.
  • Approval of the Overhead Transfer Rate for 2016 at 73.1 percent.
  • Matz and the NCUA CFO both said no more stabilization assessments, “for the foreseeable future,” the NCUSIF assessment range is 0-6, but will most likely be 0 next year.

For additional information: Glen Cooney, VP, Advocacy & Legislative Affairs, 443-325-0775,