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National Credit Union Administration
1775 Duke Street, Alexandria, VA 22314-3428
ALL HINGE ON LEGAL AUTHORITY
BY J. MARK MCWATTERS, NCUA BOARD MEMBER
I am returning in this month’s column to
field-of-membership issues—some of
which I addressed last month—because
these matters are of critical significance to the future of the
credit union system.
While I continue to consider various options, I have no doubt
that the Federal Credit Union Act can support more flexibility
for credit unions as it relates to field of membership. There is
wide agreement, certainly among credit unions, that our
current rules and restrictions on fields of membership are too
rigid, and, in my view, the agency’s requirements go beyond
what the Federal Credit Union Act directs in a number of
instances. For example, credit unions that serve communities,
urban or rural, as well as underserved and low-income areas
could be afforded more latitude, based on how we define
While field of membership is a prime candidate for regulatory
relief, NCUA does not enjoy complete discretion to define
these terms or make other changes without connecting those
amendments and modifications to what the law says, and to
the principle of reasonableness.
It may be advantageous to growth for a geographically
based credit union to include a number of states in its field
of membership, but the question is whether such a swath
can be viewed as a community, consistent with the Federal
Credit Union Act. This may be an issue that should be
decided on a case-by-case basis, under a standard process
that allows a credit union to demonstrate the area it seeks
is indeed a community.
In addition, NCUA must develop and include with any
proposed changes, a sound rationale for why field of
membership can be changed now when just a few years ago
the agency was convinced a different approach was what the
Federal Credit Union Act required.
How we amend restrictions at this time will likely determine
field-of-membership parameters well into the future, at least
until there is action from Congress.
Which brings me to another key point about field of
membership: I want NCUA to be bold, and I want the agency
to present to you a field-of-membership proposal that will
foster and facilitate credit union growth.
Even so, the most significant changes on field of membership
can only come from Congress. Is that a priority for credit
unions, and if it is, who will begin the leadership process to
achieve such changes?
NCUA has an important role to play, but in order to accomplish
meaningful relief on field of membership, credit unions will
need to agree upon and decide what changes they want to
pursue and develop a plan of action for success in Congress.
Your views on the matter are important. If you have not
weighed in yet on field-of-membership concerns, please email
the Field of Membership Working Group your suggestions at
NCUA’s field-of-membership regulations cover federal credit
unions directly, but they influence and affect the entire credit
union system in various ways. It is time for changes, but
changes that are right and justifiable under the law.
“I want NCUA to be bold, and I
want the agency to present to you
a field-of-membership proposal
that will foster and facilitate credit