A final rule that modernizes service facilities requirements for multiple common-bond credit unions has been published in the Federal Register, and takes effect Dec. 27. At its November meeting, the NCUA board of directors unanimously approved the final rule.
For purposes of adding groups, the final rule includes any shared branch, shared ATM, or shared electronic facility in the definition of “service facility” for a multiple common-bond federal credit union that participates in a shared branching network.
The final rule, however, does not incorporate other changes proposed to the definition of service facility, including ATMs as service facilities for underserved area additions. “ATMs continue to be excluded from the definition of service facility for additions of underserved areas,” the final rule states.
Shared locations, including electronic facilities offering required services such as video teller machines, are considered service facilities for purposes of multiple common-bond credit union additions of underserved areas, regardless of whether the FCU has an ownership interest, according to the final rule.
“A location must accept deposits, take loan applications, and disburse loan proceeds to qualify as a service facility for an underserved area,” according to the NCUA. “Just as for select group additions, an ownership interest in a shared branching network is no longer a requirement for a multiple common-bond federal credit union using a shared facility to add an underserved area.”
The rule continues to require a credit union that adds an underserved area to its field of membership to establish and maintain, an office or service facility in the community within two years.
In February, New York Credit Union Association President/CEO William J. Mellin penned a letter to the NCUA in support of the proposed rule, noting that participating credit unions could use this flexibility to provide services to underserved communities. He also called on the agency to authorize the use of internet services to satisfy branch location requirements.