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HCUA Files Comment Letter on Associational Common Bond

On February 8, 2016, Heartland Credit Union Association (HCUA) filed a comment letter supporting the proposed field-of-membership modifications. National Credit Union Administration's (NCUA) proposed modernizations are needed because of concerned that the federal charter is falling behind many state charters, thus becoming a barrier to the flexibility needed to operate dynamic and efficient cooperative financial institutions.

However, HCUA believes NCUA could do more to help. Some additional suggested improvements include:

  • Improving the merger process by having the NCUA facilitate mergers between credit unions with unlike field of membership when there is no desire to retain the merged credit union’s field of membership by establishing a process that eliminates the need for a conversion. NCUA could do this by providing clear guidance;
  • Allowing federal credit unions that convert to a community charter to keep approved groups in their fields of membership that are outside this new community;
  • Addressing expansion by credit unions with grandfathered field of membership that do not fit under current or proposed rules;
  • Re-instating the pre-2010 narrative approach for defining a community to be used when a community cannot be adequately defined by a statistical area or political jurisdiction;
  • Further evaluation of the agency’s process for approving field of membership expansion, specifically the application process;
  • Increasing efforts by the NCUA to help credit unions find and serve underserved areas. This includes approving underserved areas that are contiguous with a boundary, eliminate or raise the population limit for statistical areas and develop a list of underserved areas and make that list available to credit unions.

Regarding the provisions already in the proposal, HCUA has made a number of suggestions including raising the rural district population limit to one million people (while grandfathering higher limits allowed under the current rule); raising the threshold to 5,000 employees working at a facility or industrial park to fall in a field of membership (the NCUA proposed a 3,000 limit); and raising the threshold of people in stand-alone groups that can form a new credit union to 10,000.