This past November the National Credit Union Administration (NCUA) put out a proposal for comment regarding field of membership.  This proposal, by NCUA’s own account, is the most sweeping change on membership limitations in the agency’s 45-year history and goes to the basic ability of credit unions to get new customers in the door.

As we are all aware, credit union membership is supposed to be limited and the common bond shared between credit union members meaningful.  However, the proposal’s roughly dozen substantive changes build on one another to allow almost any federal community credit union to serve almost any geographic area or population center it wants, subject only to 2.5 million population caps NCUA has indicated it is looking for reasons to raise.  Community credit unions will be able to cross state lines with minimal review, and the proposal also allows credit unions based on employer or associational groups to serve consumers through transactional websites, effectively allowing national online credit unions even where they do not have a bricks-and-mortar presence.  These actions by the NCUA are just the latest attempt to grant credit unions the powers they have long sought in Congress through the regulatory process, without Congress taking a single vote. 

The ABA has prepared a template letter that the CBA is asking our member bankers to personalize and send to the NCUA expressing concern over the proposal. During the next few weeks the CBA will be partnering with the ABA on other advocacy actions related to this proposal, but banker letters are a critical component to our efforts. And while, the NCUA’s core constituents are members of the credit union community, banker engagement is imperative to make the NCUA think twice.  Additionally, strong banker involvement will likely be noticed by the media and therefore elevate the issue on Capitol Hill. Thank you in advance for your consideration and action on this important issue and we will keep you informed as new developments arise.