Proposed FOM changes would streamline ability to reach underserved

February 16, 2023

The NCUA Board proposed chartering and field-of-membership changes and issued its final cyber incident reporting rule at its Thursday meeting. The board also heard a quarterly update on the share insurance fund, which noted an increase in the fund's equity ratio to 1.30%."

The proposal would amend the chartering and FOM rules through nine changes to enhance consumer access to financial services, especially in low- and moderate-income communities while reducing duplicative or unnecessary paperwork and administrative requirements.

“Getting credit union services to more communities across the country is important to CUNA, state leagues and the credit unions we serve, and making that easier to achieve has a big impact on access,” said CUNA Deputy Chief Advocacy Officer Jason Stverak. “While we need to review the proposal in detail, we thank the NCUA board for working to streamline the ability of credit unions in reaching underserved communities."

Specifically, the proposal:

• Includes four changes on underserved areas that multiple common bond federal credit unions may seek to add to their FOMs, designed to streamline existing application requirements and clarify the role of data and criteria that other federal agencies provide relating to underserved areas.
• Includes three provisions to simplify application requirements for community-based federal credit unions by eliminating the need to submit redundant or less useful information and providing a standard form for business and marketing plans.
• Eliminates the business and marketing plan requirement for certain federally insured, state-chartered credit unions that seek to convert to a federal charter while serving the same community FOM.
• Expands the community based FOM affinities to recognize the growth of telecommuting and remote work for companies headquartered in a community.
• Includes a provision to allow all federal credit unions to better capture the ongoing bond between individuals within a field of membership and their immediate family members following the death of a member.

The cyber incident reporting final rule requires federally insured credit unions to notify NCUA as soon as possible—but no later than 72 hours after—it reasonably believes a reportable cyber incident has occurred.

This notification requirement provides an early alert to the NCUA and does not require credit unions to provide a full incident assessment to the NCUA within the 72-hour timeframe.