Monday, February 1, 2016

Rebutting NAFCU's Absurd FOM Claim

In a Bank Think piece in the American Banker, Carrie Hunt, the National Association of Federal Credit Unions' Executive Vice President of Government Affairs and General Counsel, wrote "[i]t has been over 15 years since the NCUA last tackled the field-of-membership issue."

But this statement lacks credibility.

In fact, over the last fifteen years the National Credit Union Administration (NCUA) has made numerous changes to its field-of-membership (FOM) rule.

NCUA has several times expanded the population size threshold for a well-defined local community and a rural district.

For example, NCUA initially set the population size threshold for a rural district at 200,000 individuals in 2010. The agency in 2013 raised the population limit to 250,000 or 3 percent of the state's population. Now, NCUA is proposing to raise the population size to 1 million residents.

In 2003, NCUA for the first time defined a metropolitan statistical area (MSA) as a well-defined local community as long as the population did not exceed 1 million. In 2010, the population threshold for a MSA or a Metropolitan Division of a MSA was increased to 2.5 million people.

In addition, NCUA in 2003 defined a single political jurisdiction regardless of population size as a presumptive well-defined local community. Prior to the 2003 change, the population size was 300,000.

Also, in 2000 contiguous political jurisdictions qualified as a local community as long as the population did not exceed 200,000 residents. In 2003, the population threshold for contiguous political jurisdictions was raised to 500,000.

NCUA in 2003 expanded the scope of a single common-bond credit union by authorizing a trade-wide, industry-wide, or profession-wide common bond.

Furthermore, NCUA last year made it easier for credit unions to add associations to a federal credit union's FOM.

To claim that NCUA has not addressed FOM issues over the last 15 years is simply wrong.


  1. The NCUA has nibbled at the issue, but has not taken a comprehensive look at the total FOM body of rules in quite some time. So, yes if you take that comment verbatim, you are correct.

    But you are a smart man and I'm sure you understand that what the NCUA meant by that statement is that they were addressing the overall issue of FOM restrictions, which is antiquated and arbitrary and deserves some re-evaluation.

  2. If you wish to address antiquated and arbitrary FOM restrictions, this is best done by Congress.

  3. Right. Needs congressional deliberation and decisioning.
    Wait, congressional deliberation and decisioning...that's a modern day oxymoron.
    Which is why NCUA takes liberty in thumbing their nose at congress and congressional intent on :
    Fom, Mbls,charter change rules, proposed supplemental capital, contingency lawsuits.
    By doing nothing, congress is cus bff!
    By writing these goofy letters seemingly everyday, Nafcu the lobbyist that accomplishes nothing for cus (like CUNA and ABA) is "papering over" their performance.
    Seemingly nice people are resolved to fairy tales to keep their jobs.
    Write on!
    But don't think we are fooled.