On Oct. 27, the NCUA board approved revised field of membership rules intended to fix some of those problems. And the board approved proposed rules that will allow credit unions even more flexibility.

Many of the provisions of the final rule were part of the proposed rule issued last year. However, the NCUA did not include a proposal defining a congressional district as a well-defined local community in the final rule. The NCUA received 11,380 comments on the proposed rules, with commenters generally supporting them by a ratio of about three to one.

The goal, according to NCUA Board Chairman Rick Metsger, is to make it easier for people to gain access to affordable financial services.

Credit unions are still weeding their way through the rules, but Roger Heacock, president/CEO of Black Hills Federal Credit Union in Rapid City, S.D., said the rules should be a boon for rural credit unions.

“That will enable us, if we choose to, to expand our services,” he said. Black Hills, with assets of $1.2 billion, serves a particularly sparsely populated area. The credit union serves 20 counties — several of which have fewer than five people per square mile.

In such counties, banks or credit unions, for that matter, can't afford to build a branch. “There isn't the population to have a footprint,” he said, adding that with technology, there is a decreased need for a branch.

UHS Employees Federal Credit Union has no grand field of membership plans, according to Jack Ewald, president of the Johnson City, N.Y.-based institution with $17 million in assets.

“We're really not interested in expanding our field of membership,” he said.

UHS serves people who are affiliated with the UHS healthcare system — including the system's vendors. And sometimes, Ewald said, some of those vendors are sold to a new company. In those cases, the credit union has had to jump through a complex system of hoops before it can serve that new company, Ewald said. “The new rules hopefully will ease that process,” Ewald said.

The impact of the current FOM rules and the constraints they place on credit unions is also evident in comments institutions filed as part of the rule-making process.

“My credit union once tried to add a county adjacent to its service area,” Meridia's Hoffman wrote in his comments. “Even though the area into which we were seeking to expand was within close proximity of our existing footprint, because it was located in a separate county it didn't fit within the geographic boundaries that the NCUA now uses to determine if a community is 'well-defined.'”

As a closed charter credit union, the GEM Federal Credit Union has been unable to offer services to people outside its Select Employee Group. “These people live in our area of town and there are not any other credit unions in this part of town,” wrote Kim Colbenson, president of the Minot, N.D.-based credit union with $24 million in assets.

In addition to approving the final rule, the NCUA approved a proposed rule that, if adopted, would increase the population limit to 10 million on a well-defined local community other than a Single Political Jurisdiction. The proposed rule would also allow applicants seeking approval to initially form, expand or convert to a community charter the option of submitting a narrative to establish the required common bonds instead of relying on a “presumptive community” standard.

The reaction from the banking community was swift and blunt, with the Independent Community Bankers of America accusing the NCUA of being in the tank of the financial institutions it regulates.

“The NCUA should focus on enforcing the law — not carrying water for the industry it is charged with regulating,” ICBA President/CEO Camden Fine said. “The action taken today is yet one more example of this regulatory cheerleader's focus on agency self-preservation.”

Fine added that if credit unions want to eliminate the common bond requirements, they should be taxed the same way as banks.

And credit union officials are expecting the bankers to file suit and possibly to take the issue to Capitol Hill next year.