Friday, October 28, 2016

NCUA Board Proposes to Quadruple the Population Size Limit for a Community Charter to 10 Million

The National Credit Union Administration (NCUA) Board on October 27 proposed to increase the population size of a presumptive community charter for a federal credit union (FCU) to 10 million.

The proposed rule would quadruple the population limit from 2.5 million to 10 million for a well-defined local community (WDLC) consisting of a statistical area or a portion thereof.

The proposal stated that "the Board anticipates that many areas that would qualify as a WDLC will experience population growth over time. The Board therefore believes that its policy should anticipate and accommodate inevitable growth ... in order to maximize the potential membership base available to community credit unions."

In justifying the higher population limit, the proposal stated that the 10 million population limit conforms to the population of the most populous single political jurisdiction approved by the Board (Los Angeles County).

In addition, the Board believes the 10 million population proposal would narrow an inherent imbalance between FCUs and state-chartered credit unions. According to NCUA, there are at least nine states that permit their credit unions to serve a state-wide field of membership.

Furthermore, the proposal would allow an FCU to submit a narrative, supported by appropriate documentation, to demonstrate that the community it wishes to serve qualifies as a WDLC. The appendix to the propose rule identifies thirteen criteria that the agency has historically found "the most useful and compelling ... to demonstrate common interests or interaction among residents of a proposed community."

The proposal will have a 30 day comment period.

Read the proposal.


  1. Any idea which nine states permit state-wide FOMs?

    1. The following states with populations in excess of 2.5 million have state-wide FOMs -- California, Indiana, Iowa, Michigan, Nevada, North Carolina, Ohio, Washington, and Wisconsin.

  2. It is possible under the California Credit Union Law for a state-licensed credit union to have a statewide community charter along with statewide SEGs. I don't think any have been approved by regulatory agency, yet. Some are close if you look at populated areas.



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