The NCUA Board has a lot on its plate as it prepares for its regular monthly meeting tomorrow. It's scheduled to approve a budget and set the fee schedule and overhead transfer rate that will fund NCUA's operations in 2016 and tackle field of membership rules, as well.
NCUA approved a $279.5 million budget for 2015 that was adjusted downward to $276.5 after a mid-year budget review. The agency tapped the share insurance fund to pay for the bulk of its costs - about 72% --and obtained the rest from fees charged to individual credit unions.
After addressing its budget, the board will is expected to act on the first comprehensive re-write to its field of membership regulations in a dozen years. While the details haven't been released, officials have indicated the changes will be far-reaching. Matt Biliouris, who led the in-house working group that studied the issue, said the update contains the most sweeping changes to the field of membership regulations in more than two decades.
Industry trade groups have recommended procedural improvements such as implementing deadlines to speed the review of field-of-membership applications to substantive changes, like allowing fields of memberships to include multiple political jurisdictions with areas of up to 20,000 square miles and populations up to 10 million.
In a "white paper" it released earlier this year, NAFCU argued such changes made sense since "geographic proximity is no longer a significant factor in a credit union's ability to serve its customers."
Not surprisingly, bank groups have expressed strong opposition to any attempt to expand the current field-of-membership definition.
"These new actions, if taken, would be yet another abuse of both the letter and spirit of the law," said American Bankers Association president and chief executive Frank Keating in a press release earlier this year. "Congress should be very concerned, and NCUA should quickly and strongly reject this attempted power grab."
Indeed, the ABA sent a letter to NCUA Chairman Debbie Matz Wednesday expressing concerns about the new rule.
The credit union lobby has brazenly requested that NCUA gut limitations established by Congress to make credit union membership meaningful, including requirements that community credit unions only serve well-defined local communities, neighborhoods, and rural districts," wrote Rob Nivhols, incoming president and CEO of the bank trade group. "We are very concerned [Thursday's] proposal will enable credit unions, especially the largest credit unions, to move even further away from the narrow common bonds that define their missions. When anyone in an entire state can join a credit union, or when credit unions advertise that "anyone can join," or when credit unions use Potemkin 'associations' to sign up virtually anyone as a customer, the common bond ceases to be a meaningful requirement. That is a basic reality Congress never imagined when it granted credit unions their privileged tax treatment, but many members have realized in recent years.
