Marvin Umholtz, president and CEO, Umholtz Strategic Planning and Consulting Services, Olympia, Wash.
NCUA Board Chairman J. Mark McWatters gets to make the ultimate call on whether or not to appeal U.S. District Court Judge Dabney Friedrich’s ruling. However, every time the NCUA board gets accused of overreaching in the courts, as it might again appealing this FOM decision, the NCUA runs the very real risk of being found “guilty as charged” – and in a very public way.
I have long considered the common bond and field-of-membership limitations in the Federal Credit Union Act, and especially as interpreted by the NCUA’s often-confusing rules, to be counter-productive anachronisms that should have been totally repealed long ago.
In this day and age, how crazy is it anyway to limit, via statute and rule, who any entity’s customers can be or where they can be located? That sounds dangerously like a fair lending violation in the making, too. “Excluding” rather than “including,” doesn’t make for good marketing messaging either.
An outright repeal of the statutory FOM limitations would take political guts, but until that political capital is invested in fundamental statutory change, the heartburn of banker vs. credit union FOM expansion lawsuits will continue unabated.
If the credit union industry truly believes the institutions’ mission is not linked to credit unions remaining tiny and limited in scope, then it should stand tall and tackle this ugly FOM beast at its roots – by overhauling the statutes and relevant rules.