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NCUA’s Revised Field-of-Membership Rule
Friday, September 22, 2017 7:00 AM

As you have likely heard, the National Credit Union Administration recently revised its field-of-membership rules. The NCUA Board unanimously approved the new FOM rule at its October 2016 open meeting. Key changes in the final rule include the following:

  • Modernizing the definition of “multiple common bond” to streamline the process for adding new groups to a charter;
  • Enlarging the pool of potential members by expanding the areas that may be served by a community charter;
  • Updating the process of defining an “underserved area”;
  • Revising the “rural district” definition to include populations of up to 1 million people; and
  • Expanding the definition of a “trade, industry or profession” as a single common bond.


Field-of-Membership Overview
A federal credit union may have one of four types of charters, defining its common bond/field of membership that it may serve. For a complete description of the rules and procedures regarding each charter type, credit unions should refer to the Appendix B to Part 701-Chartering and Field of Membership Manual.

Briefly, the four types of charters are:

  • Single-occupational common bond: If a credit union serves a single-occupational sponsor, such as ABC Corporation, it will be designated as an occupational credit union. A single occupational common bond credit union may also serve a trade, industry, or profession (TIP), such as all teachers.
  • Single-associational common-bond: If a credit union serves a single associational sponsor, such as The Ohio State University Alumni Association, it will be designated as an associational credit union.
  • Multiple-occupational/associational common-bond: If a credit union serves more than one group, each of which has a common bond of occupation and/or association, it will be designated as a multiple-common-bond credit union. A multiple common-bond federal credit union may include in its field of membership, without regard to location, communities satisfying the definition of underserved areas in the Federal Credit Union Act. Adding an underserved area will not change the charter type of the multiple-common-bond federal credit union. More than one multiple-common-bond credit union can serve the same underserved area.
  • Community: A community charter is based on a single, geographically well-defined local community, neighborhood, or rural district where individuals have common interests and/or interact.
    • NCUA recognizes three presumptive Well-Defined Local Communities:
      A single political jurisdiction;
      • Core based statistical area; or
      • A combined statistical area (CSA) (added with the Oct. 27, 2016, FOM Rules)

Who can federal credit unions serve?
A federal credit union's charter provides the description of its field of membership. Field of membership is defined as the persons (including organizations and other legal entities) a credit union is permitted to accept for membership. Generally, a credit union may only offer share accounts and grant loans (and various other authorized services) to persons within the field of membership who have actually become members of the credit union.

A credit union should refer to its own charter (Section 5) and bylaws (Article II) to determine if a business or organization is eligible for membership. Membership requirements depend on:

  • The type of charter the credit union holds (single occupational common-bond, single associational common-bond, multiple common bond, or community).
  • The type of business entity or organization (sole proprietorship, partnership, corporation, limited liability company, or club/association).

See the Membership Eligibility topic in our InfoSight compliance manual for more information, or call Information Central at 800-442-5762, ext. 8515.