Population Limit for Rural District Increases to 1 Million People

The National Credit Union Administration (NCUA) Board on October 27th quadrupled the population limit for a Rural District.

The final rule increased the population limit for a so-called “Rural District” to 1 million people from 250,000. At the same time, NCUA dropped the alternate population limit of 3 percent of the population of the state in which the majority of the Rural District's residents would be located.

But as I pointed out previously, the final rule will allow an FCU to arbitrarily cobble together densely populated urban areas with sparsely populated counties. In fact, NCUA’s Rural District definition could define a region as rural, despite having more than half of the population living in urban areas.

Also, while NCUA states that a state does not meet the requirement of being a well-defined local community, the Rural District population expansion provides a backdoor for an FCU to have a state-wide field of membership.

Potentially, the states of Alaska, North Dakota, South Dakota, Vermont and Wyoming in their entirety could be designated as rural districts.

However, more than half of the residents in the states of Alaska, North Dakota, South Dakota, and Wyoming live in urban areas.

If this occurs, this would represent an abuse of the agency’s discretion.

Read the final rule.