Field of Membership: a Regulatory Vestigial Organ

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Read more at chipfilson.com

The NCUA and a few state regulators still profess fidelity to the field of membership (FOM) concept. Credit union competitors love the idea as a political attack weapon. The first credit unions were begun with open, community service areas. Only later were specific FOM requirements introduced by law.

Now the last bastion of this formerly sacred concept, is getting a new charter. The NCUA’s process is one of attrition. Few applicants survive the regulatory obstacle course; most give up. Bureaucratic instincts die hard. The impulse to stretch the process interminably is because it is somebody’s lunch pail.

I was reminded of this anachronistic obsession by a CEO’s reaction to FOM commentaries on NCUA’s recent “updates.”

“Depending on your point of view, these are trade groups guarding the gates like an old dog tied to a tree; or the NCUA winning a shadow boxing match with banker’s lobbies swinging at ancient windmills. It’s a time of political theater where trades and regulators prop up their dues.”

Everyone is welcome

A second reminder was this website: The Largest Credit Unions Anyone Can Join 

This website, Deposit Accounts–“a different kind of bank account comparison site”–is apparently supported by Lending Tree. Under each credit union name is the link “how you qualify” describing how anyone can join.

The list ranges in size from Cadets FCU in Buffalo, NY at $14.8 million to PenFed in VA at $26 billion. Some are federal and some state charters. All have a member option open to anyone.

The purpose of the listing is described as follows:

Overview of the All-Access Credit Union List

The list is now updated daily. By default, the list is ordered based on asset size. Click the column title “Credit Unions” to order alphabetically or “Branches” to order based on the number of branches.

Click on the name of the credit union to visit our hub page for that credit union. The hub page lists all of my blog posts for that credit union. It also includes the credit union rate tables, financial health, branch locations and readers’ remarks.

A reminder

Before deregulation credit unions would frequently use the phrase, “my members,” to assert, and no one else’s. Today members have choices even among credit unions. These listings remind us that credit unions succeed not simply by whom they serve, but how they serve their member-owners.

Author


  • A nationally recognized leader in the credit union industry, Filson is an astute author, frequent speaker, and consultant for the credit union movement. He has more than 40 years of experience in government, financial institutions, and business. Chip co-founded Callahan and Associates. Filson has held concurrent positions at the NCUA as president of the Central Liquidity Facility and Director of the Office of Programs, which includes the NCUSIF and the examination process. He holds a magna cum laude undergraduate degree in government from Harvard University. After being awarded a Rhodes Scholarship, he earned a master’s degree in politics, philosophy, and economics from Oxford University in England. He also holds an MBA in management from Northwestern University’s Kellogg School in Chicago.

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