Amended FOM Application Requirements for CSA and CBSA

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On Oct. 14, amendments to the National Credit Union Administration's (NCUA) chartering and field-of-membership rules (12CFR Part 701 Appendix B) will go into effect. These changes will allow a credit union applying for NCUA approval of a community charter, expansion, or conversion to designate a Combined Statistical Area (CSA) or an individual, contiguous portion of a CSA as a well-defined local community (WDLC) if the area has a population of 2.5 million or less.

Beginning Oct. 14, prospective and existing federal credit unions seeking a community charter may use a CSA or portions of a CSA (within certain limitations, as defined in the rule) as a basis for defining their proposed service area without documenting how a CSA’s residents interact or share common interests. The Board’s approval of this final rule will facilitate greater access to safe and affordable financial services for all Americans.

The rule also clarifies that an applicant credit union must provide the NCUA with the business rationale used to define a CSA or Core-Based Statistical Area (CBSA) if the defined area does not include an area’s largest county or named city. Applicants should outline the rationale in the submitted business and marketing plan. The new provision ensures federal credit unions avoid potentially discriminatory practices when establishing a proposed service area.

In April 2018, a ruling in a lawsuit resulted in the NCUA revoking approval for federal credit union community charters, expansions, and conversions based on the CSA provision in the NCUA’s Chartering and Field of Membership Manual. The NCUA’s Office of Credit Union Resources and Expansion has contacted affected credit unions to confirm that the NCUA is reinstating the CSA (or portion thereof) that was previously approved. The NCUA will also proceed with processing credit union applications for a community charter, expansion, or conversion based on a CSA or CBSA (or a portion thereof) that were placed on hold during the litigation.

I encourage credit unions to review the amended rule requirements before submitting a new application for a community charter, expansion, or conversion. If you have questions about this letter or the rule changes, you can contact the NCUA’s Office of Credit Union Resources and Expansion at 703.518.1150 or

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