The NCUA on Monday reminded credit unions that field of membership rule changes unanimously approved at the NCUA’s July board meeting take effect on Oct. 14.

In a letter to credit unions, Rodney Hood, NCUA chairman, encouraged credit unions to review the amended rule requirements before submitting a new application for a community charter, expansion or conversion.

The final rule revising changes to NCUA’s chartering and FOM regulations re-adopts a provision to allow applicants to designate a combined statistical area, or an individual, contiguous portion, as a well-defined local community if the chosen area has a population of 2.5 million people or less, according to the agency.

“Beginning Oct. 14, 2020, prospective and existing federal credit unions seeking a community charter may use a CSA or portions of a CSA (within certain limitations, as defined in the rule) as a basis for defining their proposed service area without documenting how a CSA’s residents interact or share common interests,” the letter stated. “The board’s approval of this final rule will facilitate greater access to safe and affordable financial services for all Americans.”

Credit unions that had their combined statistical areas removed from their FOM because of litigation will be contacted by the agency to determine if they would like those reinstated and, if so, NCUA will do so as soon as the rule is effective, according to the agency.

The changes follow a U.S. Court of Appeals for the District of Columbia decision upholding large portions of a rule promulgated by NCUA in 2016 giving federal credit unions greater flexibility to expand into surrounding communities.  The ruling required the NCUA board to provide additional information to illustrate its decision to eliminate the requirement to serve the urban core will not result in racial gerrymandering.