Recent defections by large credit unions from a federal charter to a state charter, as well as announced charter changes, will cause the National Credit Union Administration (NCUA) Board to push the envelop with regard to changes to its field of membership (FOM).
A column by NCUA Board member Metsger in the March 2015 NCUA Report noted that over the past four years federal-to-state conversions are running nearly 3-to-1 and the pace is accelerating.
Recent defections from the federal charter include $6.5 billion Suncoast CU (Tampa, FL), $1.4 billion American Eagle Financial CU (East Hartford, CT), $1 billion Rogue CU (Medford, OR), $947 million Oregon State CU (Corvallis, OR).
In addition, there are other defections in the pipeline. For example, $4.2 billion Ent FCU (Colorado Springs, CO) is in the process of voting to switch to a state charter. United FCU with $1.9 billion in assets (Saint Joseph, MI) is merging with Lake Michigan CU (Grand Rapids, MI) and will opt for a state charter.
In response to these defections by large federal credit unions, NCUA has formed a Field of Membership Working Group to develop recommendations to enhance the federal charter and make it more competitive with state charters.
Any recommendations coming from this working group later this year should dramatically expand the fields of membership for federal credit unions.
After all, NCUA Board member McWatters in the October 2015 NCUA Report wrote that he wants any fields of membership proposal coming before the NCUA Board to be bold.
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