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In response to the NCUA's proposed rule to modernize the definition of a "service facility" for multiple common bond (MCB) federal credit unions (FCUs), NAFCU Senior Regulatory Counsel Elizabeth LaBerge shared the association's support of the rule and offered clarifying suggestions.

"NAFCU and our members have long advocated for NCUA to modernize the Manual in recognition of the advent of technology and its impact on commerce and consumer behavior," wrote LaBerge. "The proposed rule would define 'service facility' in a manner that provides clarity, consistency, and the appropriate recognition of technological advances and the current operation of shared branching."

As proposed, the rule would include any credit union ATM or a shared branch, shared ATM, or shared electronic facility in the definition of “service facility” – regardless of whether the FCU is an owner of the shared branch network. 

NAFCU has long been supportive of efforts to modernize rules relating to field of membership and has highlighted the need for credit unions to be able to access relief and tools to reach underserved communities.

"Field of membership is an important part of what makes credit unions unique, but it should not be used as a stricture against healthy credit union growth and improving access to credit unions for underserved communities," noted LaBerge in the letter. "Without regulatory and legislative relief, NAFCU and our members are concerned that credit unions will be unnecessarily and unjustifiably obstructed in their ability to invest in appropriate technology and perform in the consumer finance sector, which is increasingly competitive and innovative."

The letter also addresses issues related to:

• a variance in definition of a service facility regarding underserved areas found in the manual;
• revisions of the definition to include "facilities that are accessible to groups within the FOM through online services;" and
• improving access to credit union products and services for underserved communities.

LaBerge also highlighted the importance of recognizing online and mobile banking citing the societal shift in how products and services are available to consumers and urges the NCUA to "meaningfully incentivize and facilitate" credit union investment in these technologies.

"The NCUA must recognize and reckon with this changed world and ensure that federal credit unions and the consumers they would like to serve are not penalized for investing credit union capital in these technologies that are necessary for the survival and growth of credit unions rather than investing that capital in unnecessary and rarely visited physical branches," added LaBerge.

Additionally, LaBerge asked the NCUA to extend flexibilities to MCB credit unions that would allow the credit union to "provide narrative evidence of the anticipated symbiosis between the select group and the credit union." For example, establishing anticipated needs for financial products and services and the credit union's ability to serve them.

Of note, a banker group has organized a campaign in opposition to the proposed rule, citing falsehoods and mischaracterizations of the rule’s intent and impact. NAFCU will continue to push back against the bankers' assertions and work to ensure policymakers are well aware of the differences between not-for-profit credit unions and profit-seeking banks.

NAFCU remains committed to working with the NCUA to secure additional tools for credit unions that will allow them to provide additional help and support to their more than 123 million members and communities.