NCUA`s regulatory relief - add more members
If your federal credit union serves associations in your field of membership, or is contemplating doing so, you will benefit from the new NCUA guidance describing NCUA’s common bond rule approved on April 30, 2015.
As of July 6, 2015, NCUA’s new system has been providing automatic approval and regulatory relief to federal credit unions seeking to add associations to their field of membership in an electronic confirmation. See 12 categories:
1. Alumni associations
2. Religious organizations, including churches or groups of related churches
3. Electric cooperatives
4. Homeowner associations
5. Labor unions
6. Scouting groups
7. Parent-teacher associations organized at the local level to serve a single school district
8. Chamber of Commerce groups (members only, not employees of members)
9. Athletic booster clubs whose members have voting rights
10. Fraternal organizations or civic groups with a mission of community service whose members have voting rights
11. Organizations with a mission based on preserving or furthering the culture of a particular national or ethnic origin; and
12. Organizations promoting social interaction or educational initiatives among persons sharing a common occupational profession
Credit Unions membership under one of those 12 categories are automatically under qualifying groups. NCUA has updated the Field of Membership Internet Application (FOMIA) system to accommodate the 12 categories.
For associations that do not qualify for those categories of pre-approved association groups, NCUA is streamlining the approval process. The rule clarifies the four most important criteria NCUA considers to approve a valid association. See criteria:
1. Whether the association provides opportunities for members to participate in the furtherance of the goals of the association;
2. Whether the association maintains a membership list;
3. Whether the association sponsors other activities; and
4. Whether the association’s membership eligibility requirements are authoritative.
*To ensure that NCUA staff consistently applies the new rule, the Director of the Office of Consumer Protection (OCP) issued an internal instruction to OCP staff, and the Director of the Office of Examination and Insurance issued a Supervisory Letter to field staff.
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NCUA, July 15, 2015 "How to Add Associations to Your Field of Membership"http://www.ncua.gov/Resources/Documents/LTCU2015-03Enclosure1.pdf
For a full summary comparison of existing field-of-membership rule provisions to 2015 proposed rule, visit the NCUA website.