NCUA Proposes Updating Field-of-Membership Rule

Oct 25, 2019
The National Credit Union Administration issued a proposed rule that would amend the agency’s field-of-membership regulations to implement an August 2019 federal appeals court opinion.

Under the proposal, credit unions applying for a federal charter or charter change would be allowed to designate a combined statistical area or an individual contiguous portion of such an area as a well-defined local community, provided the area has a population of 2.5 million or less.

The proposed rule also explains the agency’s decision to eliminate the requirement in its 2016 final rule that a field-of-membership serve a core-based statistical area. It also would add an explicit provision to address concerns about potential discrimination in the field-of-membership selection process.

The proposal follows a U.S. Court of Appeals decision in an ICBA-supported lawsuit that largely upheld the NCUA’s rule. However, the appeals court also found that a provision of the rule could have a discriminatory impact on lower-income and minority residents, permitting the NCUA to issue the new proposed rule to address the court’s concerns.

The NCUA rule significantly expands the service areas in which community credit unions can do business. Comments on the proposed rule are due within 30 days.