Call us today to learn more about how we can expand your field of membership by adding SEGs at (202) 831-2500

Credit Union Business Development

Business development for SEG - based credit unions has long relied on developing relationships with employers, and converting them into select employee groups. This usually includes reaching out to Human Resources departments, selling them on your credit union's services, and convincing them to send a letter requesting credit union service. Only then can a credit union apply to the NCUA. 

The main problem with this is the same as with most credit union marketing -- it requires people without knowledge of the credit union industry to take affirmative, sometimes complicated steps, in this case writing a request letter on company stationary. There is too much friction in this process, and while billion dollar credit unions have the resources to walk SEGs through it, having to write a confusing letter can be an obstacle to most credit unions adding SEGs to their field of membership. 

Select Employee Groups Defined

Though commonly referred to as Select Employee Groups or SEGs, these groups can share any common bond of association or occupation, not just a single employer. Common types of SEGs include:

  • Employees of a company
  • Employees of a government agency
  • Contractors who commonly work for the same company
  • Members of a church
  • Members of a fraternal association

Federal multiple common bond credit unions grow primarily through adding SEGs, though they can also expand using underserved areas. Most state chartered credit unions also operate by adding SEGs; depending on their specific state regulations they may even be allowed to have SEGs as well as a geographic area within their field of membership. Federal single common bond credit unions can add SEGs too, and in doing so they may become multiple common bond.

The Process of Adding SEGs

For certain cases such as adding contractors who work for an employer already in a credit union's field of membership, a simple housekeeping amendment to the credit union's charter is enough. In most cases however, the credit union must receive a letter requesting credit union service, and attach it to the appropriate form below to submit to NCUA.

The NCUA prefers submitting documents for SEGs <3,000 through their Field of Membership Online Application. Larger applications can be emailed to DCAMail@ncua.gov

NCUA Rules and Restrictions on Adding SEGs

Because the statutory purpose of Select Employee Groups is providing access to credit union services for groups that don't have access otherwise, the NCUA imposes several restrictions on federal credit unions adding SEGS

  • The SEG must be located within a reasonable distance of one of the credit union's service facilities. A reasonable distance is generally considered about 25 miles or less. Service facilities can include branches, shared branching networks, and some video-teller machines.
  • If it has more than 3,000 members, the SEG must submit a statement as to why it is unable to form a credit union itself
  • If the SEG has 5,000 or more members and is already within the field of membership of another (non community chartered) credit union, the credit union must submit a letter from the overlapped credit union and a statement explaining why the benefit of adding the SEG outweighs the harm to the overlapped credit union.
  • Unless it has a low income designation, a federal credit union cannot add an associational group formed primarily for the purpose of making people eligible for the credit union.
  • Unless an association is one of NCUA's 9 pre-approved types, it will have to submit a copy of its charter or bylaws for NCUA approval.

A Better Way to Add SEGs

CUCollaborate has developed a software solution for streamlining the process of adding SEGs. It takes basic information from an online form that prospective SEGs fill out and uses it to automatically produce a SEG request letter, a letter for your Board of Directors to vote on, and a completed NCUA 4015 form. Please reach out to us if you have questions about this solution or want to start utilizing it to grow your credit union.

qualified-graphic

Contact Us to Learn More