NCUA walks back from associational common bond limits

by: Keith Leggett

Despite a promising proposal, the National Credit Union Administration walked back somewhat from its plan to rein in expansive fields of membership (FOM) for federal credit unions via associational common bonds.

The NCUA Board approved a final rule amending the associational common bond provisions of the agency’s chartering and field of membership requirements, including a requirement that the association must not have been formed primarily for the purpose of expanding credit union membership.

However, the final rule included carveouts and exceptions that undermine its stated purpose of the final rule. For example, NCUA expanded the pool of associations that will be considered to automatically meet associational common bond requirements to include parent-teacher associations, chambers of commerce, athletic booster clubs, fraternal organizations and professional associations. It also removed a requirement that an association operate independently for at least a year before being added to an FOM.

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