In an American Banker op-ed published today, the American Banker Association’s Robert Flock took the National Credit Union Administration to task over its role in supporting the significant expansion of the credit union industry, including its latest efforts to expand credit union chartering and field of membership rules.
The proposed rule “includes several amendments that would ultimately dilute credit union service to the local communities they are meant to serve,” Flock pointed out, as well as allowing credit unions to add noncontiguous rural districts to their fields of memberships. “Practically speaking, this new policy would enable a credit union in New Mexico to add an underserved rural district in Louisiana to its field of membership, flying in the face of the Federal Credit Union Act, which requires credit unions to maintain a ‘local’ presence,” he said.
The proposal would also remove certain accessibility requirements from business and marketing plans for new community charters, charter conversions or expansion applications, potentially disadvantaging disabled and elderly populations, as well as those with mobility limitations.
“The NCUA’s proposed rule on chartering and field of membership follows five other rules relaxing membership standards throughout the last several years,” Flock wrote. “While each imparts only subtle changes to the overarching field of membership architecture on its own, the cumulative effect of these rules is undeniably a weakening of the standard for credit union membership and community service. The common bond used to be a central component of the credit union movement. Without strong ties between members, how are modern credit unions any different than banks—aside from not paying taxes? Congress ought to take up that question.”