NCUA Board to Tackle Nonmember Deposits, FOM Rule on Oct. 24

The NCUA board on Oct. 24 will consider two issues that has provoked controversy in the financial services industry—a final rule governing nonmember shares and a notice of proposed rulemaking on chartering and fields of membership.

In its proposed rule, the agency expressed the desire to increase the percentage of nonmember and “public unit” shares from 20% to 50%.

Credit unions said that at the time that increasing the percentage of government and nonmember shares that credit unions may accept would provide them with additional liquidity that would benefit their members.

However, banking groups contend that increasing the percentage of nonmember shares credit unions may accept would further blur the lines between credit unions and banks.

The contents of the final rule will not be released until the meeting.

While the details of the notice of proposed rulemaking also were not available, board Chairman Rodney Hood said earlier this year that the NCUA would better define how credit unions may serve core-based statistical areas without serving the area’s urban core.

The U.S. Court of Appeals for the District of Columbia asked for that clarification as part of its ruling upholding much of the agency’s Field of Membership rule.

The American Bankers Association had filed suit challenging that rule, contending that the rule would illegally expand the fields of membership that credit unions may serve.

A panel of appeals court judges upheld most of the rule but asked for an explanation of one section.

Subsequently, the ABA asked that the full appeals court consider its challenge.

That request is now pending before the court.

The board also will receive a briefing on cybersecurity, an issue that Hood said keeps him up at night.