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FOM proposal approved by NCUA with modifications
ALEXANDRIA, Va. (6/18/10)--The National Credit Union Administration (NCUA) on Thursday approved a final version of previously proposed chartering and field of membership (FOM) policy changes, setting objective and quantifiable criteria to determine the existence of a well-defined local community for areas that encompass multiple political jurisdictions.
Click to view larger image NCUA Chairman Debbie Matz and Board Memeber Michael Fryzel are briefed on one of many topics tackled at the June 17 NCUA meeting
Under the final rule, single political jurisdictions, such as a county, may continue to be the basis for a new or expanded community charter without having to meet further statistical standards. While portions of the original proposal were retained that eliminated the so-called “narrative approach” from the application, that specified how underserved areas and single political jurisdictions may be addressed, and that grandfathered previously approved well-defined local communities into the new regulations, the NCUA did make some changes in the final rule. One such change is an alteration that would allow districts with populations of 200,000 or less to be classified as “rural” for credit union community charter purposes. The upper population limit for this classification was 100,000 under the previous proposal. NCUA Chairman Debbie Matz said that the NCUA’s revised proposal removes some of the more “burdensome” elements of the previous charter application process and provides credit unions with the “flexibility” to serve consumers that would otherwise go unserved. Matz warned that while charter approval will not be “automatic,” the NCUA proposal, which will be enacted 30 days after it is published in the Federal Register, “dramatically improves” both the application process and the NCUA’s ability to evaluate those applications. NCUA staff has previously estimated that the redesigned process will shorten the amount of time needed to approve an application to "a couple of months" in most situations, with the more difficult situations needing slightly more time to be resolved. The NCUA during the meeting also voted to authorize regional directors and the director of the Office of Small Credit Union Initiatives “to process a broad range of chartering transactions” to help expedite the overall chartering process. The NCUA will also seek to ensure that credit union marketing plans address how those credit unions will implement their business plans to serve the entire community and that the plans address the needs of the underserved and various demographic groups. Other factors will also be considered, and the NCUA members during the meeting noted that credit unions should not fear immediate corrective action if their business plans do not immediately conform to the new NCUA standards.


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