ALEXANDRIA, Va. (2/21/13, UPDATED 10:12 a.m. ET)--The National Credit Union Administration has approved a final rule that expands the definition of "rural district" for field of membership purposes. The new rule sets the definition at the greater of "no more than 250,000 persons or 3%" of the population of the state in which the majority of the district's persons are located.
NCUA Chairman Debbie Matz said, ""This is really a move in the right direction and is responsive to be the needs of credit union members." She added that she looks forward to having the rule in effect to help credit unions serve more people in rural areas.
The rule will go into effect 30 days after it is published in the Federal Register.
The rural district changes are similar to those advocated by the Credit Union National Association in meetings and a comment letter on the NCUA proposal. CUNA Board Member Roger Heacock presented data to NCUA to support making the changes.
CUNA Deputy General Counsel Mary Dunn urged the NCUA to allow as much authority as legally permissible to federal credit unions to facilitate their presence in these areas of the country that are often are in serious need of financial institution services. Dunn suggested that the NCUA, in the long-term, should allow credit unions that serve rural areas to determine for themselves the size of their fields of membership, governed by the credit union's resources to serve the area sufficiently and its ability to manage safety and soundness concerns.
The agency also approved a final rule that will allow federal credit unions to purchase Treasury Inflation Protected Securities (TIPS) as a permissible investment. The agency believes that TIPS will provide an additional investment portfolio risk management tool. Allowing such investments will help credit unions protect against inflation and manage interest-rate risk, Dunn has noted.
The quarterly insurance fund report was also presented by NCUA staff at today's open meeting.
A final rule addressing NCUA employee policy issues is the lone item on the closed meeting agenda. That closed meeting is scheduled to begin at 11:15 a.m.