Summary outlines new FOM rule, which bankers challenge
Dec. 7, 2016 (updated) -- NCUA’s new rule on field membership – published today in the Federal Register (Wednesday, Dec. 7), and takes effect Feb. 6 – is summarized in the latest offering from NASCUS.
Meanwhile, the American Bankers Association (ABA) -- as expected -- filed today a lawsuit against the federal agency, challenging the new rule. In a statement, the trade group averred that the rule "disregards Congress' explicit instruction that community credit unions serve only a single, well-defined local community. Instead, it declares that large regions including millions of residents and cutting across multiple states are single 'local' communities." The banker group suggested that the rule goes "well beyond congressional limits."
The NASCUS summary notes that the 268-page rule only affects federal credit unions; state credit unions should look to their to state law for their FOM rules. However, the summary also notes that the new rule amends numerous elements of the existing FOM rules, in particular, it makes changes to the:
- Definition of a local community, a rural district and an underserved area;
- Chartering and expansion of multiple common bond FCUs;
- Expansion of a single common bond FCU that serves a trade , industry or profession (TIPs);
- Chartering or expansion of any FCU.
The summary points out that the FOM rules provide for three kinds of FCU memberships: a single common bond whose members all share the same occupation or association; a multiple common bond whose various groups share distinct occupation or association bonds, and; a community common bond among persons or organizations within a well-defined local community, neighborhood, or rural district. An FCU must choose one of the above FOMs, it cannot mix them together, the summary states.