Strengthening the federal charter and pushing for regulatory relief is at the core of NAFCU's advocacy. We push for change on many different fronts as we seek to make the regulatory regime better for credit unions. Field-of-membership changes have been at the top of our list to effect positive change for credit unions.

NCUA has taken a positive step in setting up a working group to examine field-of-membership issues. NAFCU was pleased to hear the agency announce at its Feb. 19 Board meeting that the group will soon begin reaching out to credit union stakeholders for input. We also appreciate the light shone on this critical issue in recent comments by NCUA Board Vice Chairman Rick Metsger and Board Member J. Mark McWatters. NCUA Chairman Debbie Matz also weighed in on the agency's need to review FOM rule restrictions.

While NAFCU hopes the NCUA Board's unanimous support for exploring ways of strengthening the federal credit union charter will help expedite the review process, we firmly believe that credit unions need action now. The industry has lost more than 1,000 credit unions, at a clip of more than 200 per year since the implementation of the Dodd-Frank Act. If a picture is worth a thousand words, the chart above showing a disturbing trend of declining numbers of credit unions, further underscores the urgency for FOM changes.

CUs Need Change Now

Simply put, credit unions cannot afford to have NCUA continue to study the issue without implementing some changes now.

For our part, NAFCU has recommended legislative changes in our five-point plan and regulatory action in our "Top Ten" to address current FOM restrictions.

Changes to the FOM rule is the No. 1 priority on our "Top Ten" list. Specifically, we believe NCUA can improve the process for credit unions seeking changes to their fields of membership by: (1) enabling credit unions to strengthen their associational membership charter; (2) streamlining the process for converting from one charter type to another; (3) removing or greatly increasing current population limits for metropolitan areas (1 million) and contiguous political jurisdictions (500,000) that may be served; and (4) making it easier for all credit unions to add "underserved" areas to their fields of membership.

Other Advocacy Issues

Additionally, from a statutory perspective NAFCU has advocated for:

  • allowing federal credit unions to merge and blend fields of membership more easily and not just under emergency circumstances;
  • allowing federal credit unions to add underserved areas to their fields of membership regardless of charter type; and
  • giving federal credit unions wild-card parity with state field-of-membership rules relative to geographic limitations.

Credit unions face enough challenges in the marketplace. FOM rules should not further hamstring credit unions in their efforts to maintain a competitive edge and grow their membership. While we acknowledge that some of the current FOM restrictions require legislative action, NAFCU believes that pursuing legislative changes and making regulatory revisions are not mutually exclusive activities. NCUA can offer federal credit unions more flexibility through revisions to existing FOM rules, while the industry and the agency pursue legislative changes on the Hill. NAFCU is ready and willing to work with NCUA to strengthen the federal credit union charter and win legislative changes for credit unions with Congress.
Carrie Hunt is senior vice president of government affairs and general counsel of NAFCU.