By Shana Richardson, CEO, Ser Technology

The world has changed considerably in the last 20 years. Think about all the things we take for granted every day that didn’t exist back in 1997, like Google, MP3 files, iPhones, in-flight wifi and Prosper. Technology has affected nearly every industry segment including fintech, online lenders that benefit from technology without having to comply with NCUA nor FDIC regulations.

Credit unions could provide far better service to their communities given some regulatory relief on FOM charters. Credit unions haven’t received any meaningful regulatory relief on FOM since the passage of H.R. 1151 back in 1998. While they have received regulatory nips and tucks since from the NCUA, true FOM reform must come from Congress.

It’s encouraging to note that NCUA Chairman Mark McWatters recently testified before the Senate Banking Committee that Congress should consider overhauling credit union FOM legislation to recognize “the way in which people share common bonds today which would be to provide for explicit authority for web-based communities as a basis for a credit union charter.”

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Naturally, bankers wailed in opposition to the idea before the ink on McWatters’ remarks had even dried, because a more open FOM structure and the ability to deliver services online suits the credit cooperative model better than any other. Think about how you have engaged with people today. Did you spend more time talking to your neighbors and people who live in your geographic community, or did you chat with friends using a social media app? And think about who you engaged with online and why. Do you share political beliefs, lifestyles or backgrounds? Do you have a common bond?

The credit union common bond concept remains so relevant because of the human desire to support like causes and pool resources based on commonalities. Nothing new here, but given the tremendous technology advantage today, the NCUA should address current FOM rules as they present a distinct competitive disadvantage to credit unions.

"Credit unions could provide far better service to their communities given some regulatory relief on FOM charters." - Shana Richardson

Like it or not, virtual communities are becoming increasingly important in the way we interact with others. Fintechs have combined the best of both technology and credit unions to create their own common bonds among those consumers at the forefront of modern financial services, and they’re able to do it without rigorous regulatory restrictions.

And until fintechs fall under government oversight, don’t dismay: technology options abound to grow membership regardless.