NCUA moves forward with FOM changes

NCUAboard2019

The NCUA board of directors held their monthly board meeting yesterday and unanimously approved two items: a proposed rule amending the agency’s chartering and field-of-membership regulations in accordance with an August 2019 appellate court decision, and a final rule allowing federally insured credit unions to accept a greater amount of public unit and nonmember shares.

Under the agency’s field-of-membership proposal, credit unions applying for a federal charter or charter change would be allowed to designate a combined statistical area or an individual contiguous portion of such an area, as a well-defined local community, provided the chosen area has a population of 2.5 million or less.

The proposed rule also provides further explanation and support for the agency’s decision to eliminate the requirement in its 2016 final rule that a field-of-membership serve a core-based statistical area.

Finally, the proposed rule would clarify existing requirements in the agency’s field-of-membership regulations and add an explicit provision to address concerns about potential discrimination in the field-of-membership selection process in combined statistical areas and core-based statistical areas.

Under the final rule approved yesterday, federally insured credit unions will be able to accept public unit and nonmember shares in an amount up to 50% of the credit union’s net amount of paid-in and unimpaired capital and surplus, less any public unit or nonmember shares, or $3 million – whichever is greater.

A federally insured credit union will be required to develop, maintain and make available for examination a specific use plan if its public unit and nonmember shares, combined with its borrowings, exceeds 70 percent of paid-in and unimpaired capital and surplus.

During yesterday’s meeting, the board also received a briefing on cybersecurity challenges and opportunities. The NCUA said they are developing a long-term plan to provide training and information to better prepare the agency and credit unions to meet evolving cyberthreats.

To learn more about yesterday’s board meeting, visit NCUA’s website.

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