National Credit Union Administration officials are characterizing the overhaul of its field-of-membership regulations as the most sweeping in the agency's 45-year history.

A 167-page draft of the new regulations includes a dozen proposed changes, each designed to make it easier for credit unions to assemble larger, more competitive fields of membership.

The biggest attention getter, however, involved a proposed change that the board left alone, at least for now.

The NCUA permits credit unions to use core based statistical areas, as defined by the Office of Management and Budget, for fields of membership, as long as the areas' populations are below 2.5 million. Officials did not alter the threshold, despite calls from several industry advocates, including the Credit Union National Association, for a big increase.

Still, the proposed rule's summary included an unmistakable hint that the NCUA is open to reconsidering the issue. "The board has decided to retain the … population limit, but nonetheless invites public comment on whether to adjust the limit, by what amount, and for what specific purposes," the summary said.

Bankers look askance at any possible upward revision.

"When credit unions are allowed to have so-called common bonds like 'lives in Montana,' or advertise that 'anyone can join,' the common bond ceases to be a meaningful requirement," American Bankers Association President and Chief Executive Rob Nichols wrote in a statement Thursday.

A day earlier, Nichols released a letter he had sent to NCUA Chair Debbie Matz, arguing that "regulatory relief does not mean charter enhancement, nor does it mean promoting the explosive growth of a trillion dollar industry at the expense of taxpayers, community banks, and the communities those banks serve."

NCUA Vice Chairman Rick Metsger said field-of-membership revisions are necessary to ensure the industry's safety and soundness. "To the best of my knowledge, no credit union has ever failed because its field of membership was too large, but some have failed because theirs were too small," he said during the board's monthly meeting Thursday.

Dennis Dollar, a consultant who sat on the NCUA board for seven years and was chairman from 2001 to 2004, called the decision to leave the population limit in place disappointing.

The NCUA "could have been more aggressive and still stayed well within the law's provisions," Dollar wrote in an email Thursday. "For example, there is no statutory requirement for population caps on community charters [and] there were none … until they were added in 2010."

There were a number of notable changes, with Matz asserting Thursday that "it's clear that the federal charters need a rule that is more permissive than any rule we've approved in the past."

The NCUA did propose tweaking the population limit that defines a rural district. The overhaul would raise that limit from 250,000 people to 1 million.

The proposed rule would also make it easier for credit unions with multiple-common-bond charters to add new groups to its field of membership by dropping a requirement that it add a service facility within reasonable proximity to a group's area of operation. Under the new rule, a transactional website can count as a service facility.

Board member J. Mark McWatters suggested that the field-of-membership rules would remain overly restrictive even if all the proposed changes were implemented. He said credit unions should be allowed to serve any regions they chose, as long as they could prove their field of membership constituted a well-defined local community.

"In my view, NCUA should permit credit unions to articulate a reasoned argument for the existence of a well-defined local community, rather than having to incorporate their business model into an array of core-based statistical areas, combined statistical areas, metropolitan statistical areas, metropolitan divisions, and adjacent areas, subject to population caps," McWatters said Thursday.

The NCUA's board voted unanimously to approve the field-of-membership draft, opening a 60-day comment period. The agency is expected to vote on a final version early next year.

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