ABA Condemns Latest NCUA Proposal to Loosen Credit Union Field of Membership Rules

The American Bankers Association today strongly opposed a proposal by the National Credit Union Administration that would expand the definition of “service facility” and erase the distinction between service to select groups and service to underserved areas as delineated in the Federal Credit Union Act.

In a letter to NCUA, ABA noted that the proposal would undermine congressional intent to demand a heightened standard of in-person service for underserved communities, and called for the proposal to be withdrawn. ABA also raised concerns that the proposal would consider counting a credit union website or mobile banking application as a “service facility,” potentially paving the way for national online fields of membership.

The association added that the proposal “has no reasonable basis in law or regulation and improperly expands the available field of membership for multiple common bond federal credit unions at the expense of providing financial services to underserved areas, including low- to moderate-income communities.”