NCUA Approves Field of Membership Changes and More
May 4, 2015
May 4, 2015
The National Credit Union Administration Board convened its fourth open meeting of 2015 at the agency’s headquarters on Thursday. The Board approved five items, including a final rule authorizing automatic approval of 12 types of associational groups for inclusion in federal credit unions’ field of membership.
The Board also approved four other items:
- A proposed rule to implement a new law providing pass-through share insurance coverage for lawyers’ trust accounts, realtor escrow accounts and prepaid funeral accounts.
- A final rule to extend corporate credit unions’ secured borrowing terms and allow retained earnings acquired in mergers to count toward capital going forward.
- A proposed rule to expedite access to short-term cash by allowing corporate credit unions to provide bridge loans to credit unions awaiting funds from the Central Liquidity Facility.
- A request from the Connecticut Department of Banking to exempt Connecticut-chartered credit unions from NCUA’s credit union service organization rule in favor of a substantially similar state rule.
The Chief Financial Officer briefed the Board on the performance of the National Credit Union Share Insurance Fund, which is in its strongest position in a decade. The Office of General Counsel also briefed the Board on a required interagency final rule implementing minimum requirements for state registration and supervision of appraisal management companies.
Field of Membership
Federal credit unions will be able to more easily expand their fields of membership, said the NCUA, under a final rule (Part 701) amending NCUA’s associational common-bond requirements. The Board approved the rule by a 2–1 vote.
The final rule more clearly defines which associational groups do and do not qualify for membership in federal credit unions. The final rule will provide regulatory relief by authorizing automatic approval for the vast majority of associations that qualify.
“This is the first of several significant field-of-membership fixes we intend to introduce this year, and these changes will enhance the ability of federal credit unions to serve new members,” NCUA Board Chairman Debbie Matz said. “If this rule had been in place since the beginning of last year, 87 percent of associational applications would have been automatically approved. With the adoption of these streamlined field-of-membership procedures, federal credit unions will now spend less time filling out unnecessary paperwork and more time fulfilling their missions.”
The final rule grants automatic qualification under NCUA’s rules to certain categories of associations the agency has routinely approved for federal credit union membership. At the suggestion of commenters, the Board added five categories to the seven originally proposed. In all, 12 new types of associational groups will receive pre-approval, including:
- Alumni associations,
- Religious organizations, including churches or groups of related churches,
- Electric cooperatives,
- Homeowner associations,
- Labor unions,
- Scouting groups,
- Parent-teacher associations organized at the local level to serve a single school district,
- Chamber of commerce groups (members only and not employees of members),
- Athletic booster clubs whose members have voting rights,
- Fraternal organizations or civic groups with a mission of community service whose members have voting rights,
- Organizations having a mission based on preserving or furthering the culture of a particular national or ethnic origin, and
- Organizations promoting social interaction or educational initiatives among persons sharing a common occupational profession.
The final rule, available online here, will become effective 60 days after publication in the Federal Register. NCUA will issue further guidance on implementing the rule before the final rule becomes effective.
For more news from the recent NCUA Board meeting, see the NCUA’s bulletin here.
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