Get Ready To Publicly Defend Your Community FOM

June 25, 2018 at 9:19 am Leave a comment

Happy Summer People. Yours truly is back after spending some time in God’s country (a/k/a Long Island) and going to the Harry Styles concert with my 15-year-old daughter. I have to admit I liked it.

I also took some time to read though the results of last Thursday’s NCUA board meeting. And I think the material is important and/or dense enough to be broken up into two blogs. Today I will be doing an overview of some field of membership changes the board approved and tomorrow I will be talking about additional requirements imposed on merging credit unions. State credit unions will be particularly interested. How’s that for a cliff hanger?

Under the new FOM regulations, there are limited circumstances under which credit unions can use a narrative approach to explain why an area should be considered part of a well-defined local community even though it falls outside pre-recognized government boundaries in a very helpful move the NCUA has outlined 13 criteria which credit unions should use in developing the narrative. Now remember, don’t think that your credit union has to satisfy each criterion in order to get approved for a community charter expansion but the more you can address the areas of concern to NCUA, the better off you will be.

The biggest change NCUA has approved is a requirement to mandate public hearings any time a credit union is using a narrative approach to expand beyond 2.5 million people. Under this approach, interested parties will be authorized to provide written comments on the proposed expansion and there will be a public hearing limited to no more than seven people. For those of you interested in finding out more about this new requirement, you can find it in the amendments to § V.A.2 of the Chartering Manual in the Final Rule.

This is just one man’s opinion. But because one of the most common areas of attack by the bankers is that NCUA abuses its discretion in approving community charter expansions creating a mechanism for a detailed public record and hearing process actually makes sense.

Who Said You Can’t Go Home Again Or Meet The New Boss, Same As The Old Boss

Is it just me or does anyone find it the slightest bit troubling that the NCUA Board is of so little interest to so many people that individuals are re-nominated for second acts?

Whether you are a fan of Pete Townsend or Thomas Wolfe, NCUA continues to show that it welcomes people back with open arms. Last week, as I’m sure many of you already know, the Trump Administration nominated Rodney Hood to serve as the Democrat on the pre-member board which currently only has two members. If he is approved by the Senate, board member Rich Metsger can finally get on with his life. His term would expire August 2, 2023.

What I am most interested in learning more about is whether Mr. Hood is willing to take a second look at NCUA’s pending risk based capital regulations for credit unions with 100 million or more in assets.

On that note, enjoy your day.

Entry filed under: General, Regulatory. Tags: , , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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