ALEXANDRIA, Va.-NCUA’s proposed rule expanding field of membership authorities issued for comment at the November board meeting was the icing on the cake of 2002′s credit union regulatory relief advances. Though modifications were made to virtually every portion of the regulation, according to NCUA Senior Staff Attorney and Field of Membership Task Force Chair Mike McKenna, 10 major amendments stand out. An entirely new category of occupational common bond was created to help single sponsor credit unions mitigate risk through diversification. The proposed amendment would permit federal credit unions to serve groups in the same TIP-trade, industry, or profession-within the original geographic area of the FOM. For example, a credit union sponsored by a steelworkers union could apply to serve all steelworkers, union and non-union, in the city of Detroit. The agency has proposed easing the “local community” requirements to allow a single city, county, or political jurisdiction to stand without further documentation. The definition of a service facility with regard to the “reasonable proximity” clause when adding select employee groups also would be expanded under the proposal to include wholly owned ATMs and shared branches with an ownership interest. The proposed alterations to the FOM regulation would eliminate overlap exclusions except in cases of multiple groups over 3,000, as required by statute. Another item in the proposal that credit unions were seeking was to allow credit unions converting from state to federal charters to convert without losing their original SEGs. Other items in the proposal involve: *permitting national associations within a credit union’s FOM; associations would also have to hold meetings open to all members, sponsor activities demonstrating an objective, and define eligibility; *increasing the number of potential members in determining economic viability to form a new credit union from 500 to 3,000, and, in turn, increase the threshold for use of the Internet applications (should cover 99% of requests); *eliminating the three-year waiting period for common bond conversions; *updated application forms (Appendix D); and *clarifying that a credit union requesting a second reconsideration will be considered an appeal and be prepared for a board decision. Additionally, the agency is seeking comments on how to streamline the conversion from federal to state charter. Comments on the proposed regulation are due to NCUA by February 3. Many in the credit union community are anticipating a court battle if the proposal is finalized. -

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