Credit Union Exam Solutions Presents With Flying Colors

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Mark Treichel sits down with Rick Mumm — a 34-year NCUA veteran who spent 26 of those years in field of membership work, including bylaws, mergers, liquidations, and charter expansions — to walk through NCUA's proposed rule change on customer-client relationships in field of membership decisions.

This proposal is unusual in two respects. First, unlike most of NCUA's recent deregulation announcements, it has real practical impact for credit unions seeking to add fraternal organizations or associations with any customer-client element. Second, the rule is the direct result of an actual appeal that went all the way to the NCUA Board — an appeal pursued by POLAM Federal Credit Union, led by CEO Jennifer Audette, in which the Board denied the appeal but acknowledged inconsistencies in the existing rule and committed to a rewrite.

Topics covered:

•        Why the current Chartering Manual creates inconsistency by specifically naming the Knights of Columbus as qualifying while excluding similar fraternal organizations that sell insurance

•        How Thrivent fits into the picture as another mutual insurance organization that converted from a mutual savings bank into a federal credit union

•        The affiliate-membership wrinkle: under both Knights and Thrivent, members who don't buy insurance are affiliate members without voting rights — which the Chartering Manual says shouldn't qualify for credit union membership

•        What the proposed rule actually says, why it's so sparse, and what's notably absent from it

•        Why concerns about NCUA's loss of corporate knowledge at the Office of Credit Union Resources and Expansion mean execution will matter more than the text

•        How credit unions should position applications under the new standard

•        Why credit unions with stalled or denied applications should consider submitting comment letters

Rick can be reached at rick@rcservices.com or via rcservices.com.