Next Steps for Federal Credit Unions Following Court Decision on NCUA FOM Rule


Federally chartered credit unions that expanded their Field of Membership (FOM) under the National Credit Union Administration’s (NCUA) FOM rule, should review their plans, now that a federal judge has struck down two of the rule’s provisions.  A decision handed down March 29 by the U.S. District Court for the District of Columbia is in response to a lawsuit filed by the American Bankers Association (ABA).

While the court upheld much of the FOM rule, it struck down two sections including:

  • A provision automatically characterizing a Combined Statistical Area as belonging to a local community with fewer than 2.5 million people; and
  • A provision increasing the population for rural districts to one million people.

The Northwest Credit Union Association’s (NWCUA) Compliance team issued a detailed bulletin to member credit unions Friday and has offered its services to credit unions seeking consultation.

“Credit unions which expanded under either the combined statistical areas or expanded rural definition may wish to consider revising their plans,” said David Curtis, Director of Compliance Services. “There is still the possibility that the NCUA will appeal the ruling to have a panel review Judge Friedrich’s opinion, but having a plan in place to make changes may be necessary.”

“A number of Northwest credit unions have considered expanding their charter using the rural community charter.” Said John Trull, AVP Regulatory Advocacy “We disagree with the decision and hope that the NCUA will appeal. If an appeal is unsuccessful we expect the NCUA to revise and redefine the rural designation. The previous rural designation was not a viable chartering option.”

Credit unions that received an expanded rural community charter expansion or a combined statistical area expansion were notified on Friday that they can keep any members that they have accepted but will not be able to continue accepting additional members. Any questions should be directed to the NCUA through

“There are still ways for credit unions to expand their charters, but the court decision makes it more difficult. We are here to assist our members and can help them get the FOMs that they need to stay competitive.” said Trull.

Editor’s note: NWCUA is engaged with CUNA to determine next steps in response to the court decision. Your Association’s Compliance team is a resource for questions and concerns. Reach out through the Compliance Hotline 1.800.546.4465

Posted in NCUA.