FOM proposal is ‘important step’ toward more inclusive CU membership

May 30, 2023

NCUA’s proposed field of membership changes would reduce unnecessary burdens and increase efficiency in the FOM application process, CUNA wrote to the agency Tuesday. NCUA proposed the changes at its February meeting, with the intention of streamlining access to credit unions.

“Today, the archaic FOM restrictions to which credit unions are subject are antithetical to the goal of financial inclusion and economic equity, and they impede credit unions more fully fulfilling their statutory mission to promote thrift and provide access to credit for provident purposes,” the letter reads. “We consistently urge Congress to relax or eliminate these restrictions. This proposed rule represents an important step toward a more inclusive approach to credit union membership. CUNA strongly supports this proposed rule, as the changes contemplated would help credit unions deliver necessary financial services to more Americans.”

Specifically, the proposal would:

• Make changes to underserved areas that multiple common bond federal credit unions may seek to add to their FOMs to streamline existing application requirements and clarify the role of data and criteria relating to underserved areas.
• Eliminate the need to submit redundant or less useful information and providing a standard form for business and marketing plans.
• Eliminate 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.
• Expand the community-based FOM affinities to recognize the growth of telecommuting and remote work for companies headquartered in a community.
• Better capture the ongoing bond between individuals within a field of membership and their immediate family members following the death of a member.
• Correct unintended consequences of prior rules, including a provision that may prevent credit unions from expanding into certain underserved rural areas.