ALEXANDRIA, Va.–With one third of its rules up for annual review, America’s Credit Unions is urging NCUA to consider regulatory burden and incorporate CU feedback in future reviews, and it wants field of membership rules at the top of the agency’s list this year.
As the CU Daily has reported, this year NCUA is reviewing parts 700-710 of its rules, which include chartering, field of membership (FOM) modifications, duties of directors, investment activities, and bank conversions/mergers.
“We applaud the NCUA for recognizing the stagnant nature of the agency’s FOM requirements when compared to some innovative state charters,” America’s Credit Unions said in a letter to the agency. “To that end, credit union boards of directors must have significant flexibility to determine their FOM to enhance safety, soundness, and service.
“Therefore, FOM reform is a top issue for America’s Credit Unions and our member credit unions,” the letter continues. “While we recognize that the NCUA is restricted by provisions of the Federal Credit Union Act, we believe additional changes can update the regulation’s requirements to align them with today’s economic and technological environment.”
FOM Reforms
When it comes to FOM reforms, America’s Credit Unions wants NCUA to:
- Eliminate the population cap for a “well-defined local community;” if that is not possible, it should raise it to 10 million (up from the current 2.5 million), the group said.
- Expand the current exemption to allow all immediate family members of a deceased member to be eligible for membership and broaden the definition of “immediate family” to include a wider range of legal and blood relatives
- Reconsider NCUA’s interpretation of “reasonable proximity” to credit union facilities beyond the current 25-mile radius
- Meaningfully incentivize and facilitate credit union investment in mobile and online technologies.
Improvement in Regulations
America’s Credit Unions further said the NCUA could also streamline, clarify, and/or otherwise improve regulations by:
- Reviewing federal credit union bylaws regularly to eliminate confusing provisions and reflect technological advancements
- Focus on promoting credit unions’ ability to effectively run their organizations in a way that allows them to serve their members without unnecessary risk to the share insurance fund, rather than focusing on a rule to mandate succession planning
- Be more transparent and conservative in its budgeting process
- Adopt the proposed rule to revise the current requirements for written overdraft policies
- Review clarifications to its loan participation rules, including limits on aggregate amounts of loan participations that can be purchased
- Move quickly on a rulemaking to implement the signed-into-law GENIUS Act to regulate stablecoins.
- Expand credit unions’ investment authority and enhance opportunities to engage with and invest in innovative technology solutions and fintech companies; and
- Update its Truth in Savings rule to better reflect modern banking practices around fee disclosures.
