ALEXANDRIA, Va. – The vice chairman of NCUA would like to see significant changes in how credit unions define their fields of membership – with the help of both the regulator and Congress.

Rick Metsger told attendees of a meeting of the Northern Virginia Chapter of the Virginia Credit Union League he believes NCUA should “streamline” a number of regulations to therefore expand access to credit union services for American families, including:

  • Allowing credit unions converting from single or multiple common bonds to community charters to continue serving select employer groups even if they are located outside the new community charter boundaries,
  • Permitting the addition of adjacent areas to community charters without requiring them to be Core-Based Statistical Area,
  • Eliminating the requirement that a community charter be based on a core area of a Core-Based Statistical Area,
  • Revising and simplifying the process for determining that an area is “underserved”, and
  • Allowing active-duty military personnel and their families to automatically qualify as low-income households.

“I have been concerned with field-of-membership issues for some time,” Metsger said in remarks that were made available to Credit Union Journal, “and this is an area I believe can be improved both in regulation and in law. We can modernize our rules, and Congress could update the Federal Credit Union Act, to help federal credit unions grow and serve more Americans, especially those of modest means, who do not have adequate access to an affordable, insured financial institution.”

Congressional Action

According to Metsger, federal laws also need to be changed. He noted NCUA has testified to Congress urging statutory changes to modify the Federal Credit Union Act to give the agency authority to streamline field-of-membership regulations and permit credit unions to better serve underserved communities.

“Law and regulation should, to a practical extent, reflect the situation on the ground and respond to change,” Metsger said. “Enacting statutory changes will not be easy, and it will require all of us, the regulator and the regulated, to overcome the current situation.”

The statutory changes Metsger recommends are:

  • Allowing all credit unions, not just multiple common-bond charters, to add underserved areas,
  • Simplify the “facilities” test for determining if an area is underserved, and
  • Giving community-based federal credit unions the option to structure their fields of membership in accordance with law of the state in which they operate.

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