League Speaks Out on NCUA Field of Membership Proposal

In a comment letter to NCUA dated June 30, League President Paul Gentile offered comment of four different aspects of this proposed rulemaking which would amend the NCUA Chartering and Field of Membership Manual.  In that letter, Gentile stressed the important role that the Associational Common Bond has played in making it possible for many Americans to enjoy the benefit of credit union membership.
The first of the four aspects of the rule that the League offered comment on was the "Automatic Approval" of certain groups.  The League supports a regulatory scheme which would permit groups that fall within a category that NCUA has already reviewed.  The sorts of groups include alumni associations, religious groups, and homeowners associations as well as numerous others.  The comment letter suggested that other groups ought to be considered as well.  These include, but are not limited to, agricultural cooperatives, athletic groups, and fraternal organizations.
The area of the proposal that deals with threshold requirements for new associations is one that the League believes should be reconsidered.  The comment letter explains that a rule like this is arbitrary and unnecessary and would deny many people the right to join a credit union.
The League asked NCUA to clarify the part of the proposal that applies to the "totality of circumstances test."  The test would allow groups in automatically if they meet service area and other related requirements.  Gentile argues in his letter that this would exclude many groups that share a clear and distinct common bond such as the alumni groups of colleges and universities.
The League also questioned the segment of the rule which would require that groups be within "reasonable proximity."  This idea is seen as being outdated and would create artificial barriers to service.