To many credit unions, it just makes sense.

If you work in the same office park as the credit union office,you should be able to become a member. Or, if you work for ahospital security firm, there should be no roadblocks to youbecoming a member of the hospital-related credit union.

But credit union officials say that until now, the NCUA's fieldof membership rules put roadblocks up for such sensibledecisions.

“The NCUA's present use of geographic limitations that were notdesigned for banking purposes is simplistic and unreasonable,”Michael Hoffman, president/CEO of Meridia Community Federal CreditUnion, a credit union with $65 million in assets and located inHamburg, N.Y., said in comments filed with the NCUA.

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

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

The goal, according to NCUA Board Chairman Rick Metsger, is tomake it easier for people to gain access to affordable financialservices.

Credit unions are still weeding their way through the rules, butRoger Heacock, president/CEO of Black Hills Federal Credit Union inRapid City, S.D., said the rules should be a boon for rural creditunions.

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

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

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

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

UHS serves people who are affiliated with the UHS healthcaresystem — 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 hoopsbefore it can serve that new company, Ewald said. “The new ruleshopefully will ease that process,” Ewald said.

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

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

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

In addition to approving the final rule, the NCUA approved aproposed rule that, if adopted, would increase the population limitto 10 million on a well-defined local community other than a SinglePolitical Jurisdiction. The proposed rule would also allowapplicants seeking approval to initially form, expand or convert toa community charter the option of submitting a narrative toestablish 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 NCUAof being in the tank of the financial institutions itregulates.

“The NCUA should focus on enforcing the law — not carrying waterfor the industry it is charged with regulating,” ICBA President/CEOCamden Fine said. “The action taken today is yet one more exampleof this regulatory cheerleader's focus on agencyself-preservation.”

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

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