ABA opposes expansion of credit unions’ field of membership

In a comment letter Tuesday, the American Bankers Association opposed the National Credit Union Administration’s proposed rule to significantly expand federal credit unions’ field of membership to include out-of-state remote workers and noncontiguous rural districts, resulting in a pathway for FCUs to obtain a nationwide FOM. This is contrary to statutory intent that FCUs maintain a local presence and common bond among members, ABA said.

ABA specifically opposes the inclusion of remote workers in a community FCU’s FOM as it further dilutes the common bond requirement. It is illogical to assume an employee working for a company headquartered in Oregon, but working remotely in California, has a “meaningful affinity” or “routine interaction” with people residing in Oregon who do not work for that same company, the association said. Instead, ABA recommended that credit unions that want to add an occupational group to their community charter be required to apply for a multiple common bond, or MCB, charter to accurately reflect the different constituencies they plan to serve.

The proposed rule would also remove the eligibility requirement for MCB FCUs that additions in underserved areas based in rural districts be in a state bordering the state of the credit union’s headquarters. In addition, it simplifies the statement of unmet needs that an FCU must submit when requesting to add an underserved area to its FOM. In its reasoning, the NCUA said that FCU charter applicants find the statement’s one-page length requirement as “burdensome.” ABA requested that the NCUA keep the statement of unmet needs requirements.