NCUA headquarters. (Source: NCUA)
The NCUA has proposed a key update to its field of membership (FOM) rules that could expand how credit unions add new member groups, marking another step in the agency's broader deregulatory push.
Under the proposal, the NCUA would eliminate a long-standing interpretation that automatically disqualifies associations if members are required to purchase a product or service as a condition of joining. Instead, the agency would adopt a more flexible, principles-based approach, evaluating each group based on the "totality of the circumstances."
The change focused on associational common bond credit unions, where membership is tied to participation in a group with shared interests or activities. Historically, associations built around customer relationships, such as those requiring insurance purchases or similar transactions, were often excluded. The new proposal clarified that such arrangements may still qualify if the customer relationship is incidental to the group's primary purpose.
NCUA officials said the current framework is overly prescriptive and can create unnecessary barriers to membership expansion. By shifting responsibility to a case-by-case review, the agency aims to reduce confusion while maintaining safeguards to ensure groups are not primarily commercial in nature.
The proposal would not affect community charters or occupational common bond credit unions.
If finalized, the rule could provide credit unions with additional pathways for growth, particularly through partnerships with associations that previously may have been excluded under stricter interpretations of the FOM rules.
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