Twenty-five years ago the Gulfport VA Medical Center had over 2,000 employees, volunteers and family members. It was one of the leading employers in my hometown. By the time I was selected president of the Gulfport VA Federal Credit Union in 1991, the medical center had been downsized to around 200 employees. Had it not been for the ability to diversify my credit union in the years our primary sponsor was downsizing so dramatically, I would have never had a credit union to lead. This firsthand experience demonstrated to me that the ability to diversify a credit union's field of membership through SEGs, an underserved area expansion or a community charter is absolutely critical for the long-term survivability of many credit unions. Field of membership diversification is an essential risk management tool for America's credit unions. The law allows it. The courts have upheld it. And NCUA is acting as a responsible safety and soundness regulator by furthering it where appropriate under the law and those court decisions. The proposed FOM update approved by a unanimous bi-partisan vote of the NCUA Board in November is a well-balanced regulatory proposal which represents a natural and necessary evolution of NCUA's field of membership rules. It is responsive to a changing marketplace and is fully consistent with the letter and the spirit of the Credit Union Membership Access Act passed by Congress in 1998. However, I firmly believe that this FOM proposal is as much a risk management issue as it is a member service issue, an Access Across America issue, a marketplace issue or a viability of the federal charter issue (and it is certainly all of those). As the chief regulator of America's federal credit unions, I would be remiss if I did not address the significant risk management issues involved in greater credit union field of membership diversification.a recognition that the NCUA Board expressed across party lines when we voted to put this update proposal out for a 60-day comment period. In a nutshell, NCUA's proposed update to its FOM rules is essential for providing federal credit unions with access to more diversified fields of membership which can help mitigate the future risk of losing a credit union because of economic uncertainty or the loss of a significant sponsor. Having greater field of membership diversification options is indeed more than a mere growth strategy for federal credit unions. The ability to diversify their membership base can make the difference of survival or non-survival for a credit union whose community suffers a serious economic hit or perhaps a credit union whose sponsor downsizes or goes out of business. Every provision in this proposal – from the trade, industry or professional (TIP) occupational charter to the recognition that ATMs and shared branches are legitimate sources from which to deliver credit union services at lower cost than expensive branch locations – is designed to provide greater risk management options through diversification for federal credit unions who seek reasonable opportunities for planned and managed growth. This FOM update is a reasonable progression of NCUA rulemaking under the 1998 Credit Union Membership Access Act. The operative word in the Act was "access" for potential members to have the choice to join a credit union, but the diversification of that access has a long-term risk management component that NCUA must also consider. The existing rules have proven to be successful at extending access to credit union services to millions of Americans from all walks of life, but NCUA must continue to make sure our field of membership rules evolve to provide appropriate diversification options in a dramatically changing financial marketplace. The passage of the Gramm-Leach-Bliley financial modernization law by Congress in 1999 significantly altered the financial marketplace in which credit unions operate. Field of membership rules must likewise evolve to allow credit unions to adjust to that changing marketplace if they are to remain safe and sound on a long-term basis. With banks, insurance companies and brokerage firms benefiting from the financial modernization options available to them under Gramm-Leach-Bliley, we must move our rules forward in a measured way to enable credit unions to have all of the tools available under CUMAA to diversify their fields of membership and provide opportunities for planned and managed growth. Although this update is certainly significant for credit unions facing the challenges of an evolving marketplace, each provision has been carefully evaluated to be fully allowable under existing law and perhaps could have been included in the 1999 or 2000 rules. It could even be argued that some of the provisions included in this update should have been adopted earlier. For example, Judge Kollar-Kotelly wrote in her opinion upholding the earlier rules that technological advances might require a more flexible definition of a credit union service facility to include ATMs and shared branches. The NCUA Board in 1999 and 2000, however, chose to take the progression of field of membership rules under the new law one step at a time and build our experiential base lines. This process has now evolved with over four years of experience and it is reasonably time to update the rules again. We have had a task force of NCUA's best field of membership legal experts analyze our existing rules based upon that experience to make sure we are not being more restrictive than either the law or the marketplace requires. The results of that task force's findings provided the foundation upon which the NCUA Board evaluated our experience with FOM since 1998, studied the court decisions upholding our earlier rules and drafted NCUA's 2003 FOM update proposal. The Board's diligent efforts, coupled with that of the task force, has resulted in a reasonable and appropriate field of membership update which will result in the evolution of more credit union services being offered to more Americans from all walks of life. It will also result in greater diversification options for the credit unions themselves to have planned and managed growth under the federal charter. The Board is to be commended for both its analysis and leadership in an area that is always controversial but absolutely crucial for the long-term viability of America's credit unions. I believe this proposal recognizes the importance of both expanded consumer choice and enhanced safety and soundness. Even as we respect the restrictions contained within the federal law, we must also empower the opportunities contained within that same law. In doing so, we can be pleased with the result that we will have stronger credit unions. We will have safer and sounder credit unions. We will have more diversified fields of membership. And, most importantly, our commitment to Access Across America – the word "access" derived from the Credit Union Membership "Access" Act – will be backed up by more than our words, but also by our actions. NCUA's proposed update to our field of membership rules makes the Credit Union Membership Access Act work more effectively for the over 80 million Americans who are depending on NCUA to create a regulatory environment which protects their hard-earned dollars and also enables them to still have the consumer choice of dynamic, growing and viable credit unions that are both diversified in their membership and safe and sound in their marketplace performance.