NCUA finalizes FOM rule

25542495_1752115101518706_2887136597949032630_oThe NCUA board of directors considered a final rule to reform its field of membership rules—along with other agenda items—during the agency’s board meeting yesterday.

In a positive development for credit unions, the rule provides credit unions with the option to submit an application to serve a well-defined local community exceeding 2.5 million people under a narrative approach, among other changes.

Changes to the existing regulation include the following:

  • an applicant for an original community charter, conversion, or expansion has the option of submitting a narrative, with sufficient supporting documentation, to establish the existence of the required well-defined local community;
  • the agency will hold a public hearing on narrative applications where the proposed community’s population exceeds 2.5 million; and
  • for communities that are subdivided into metropolitan divisions, the board will permit an applicant to designate a portion of the area as its community, regardless of division boundaries.

The agency views the final rule as consistent with a March 29 district court decision upholding two provisions and vacating two provisions of NCUA’s 2016 final field-of-membership rule regarding community charters.

Additionally, the board approved a final rule on voluntary mergers that will increase the minimum required time for notice to members before a merger vote to 45 days; require the merging credit unions to disclose merger-related compensation increases above $10,000 or 15 percent of compensation, whichever is greater, for certain employees and officials of the merging credit union; clarify the contents and format of the members’ notice to provide better information; and provide a method to communicate to the NCUA regarding the proposed merger.

For more information on yesterday’s board meeting, visit NCUA’s website.

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