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Single Associational Common Bond Credit Union Charter

By Sam Brownell - August 30, 2018

A single associational federal credit union may include in its field of membership, regardless of location, all members and employees of a recognized association. A single associational common bond consists of individuals (natural persons) and/or groups (non-natural persons) whose members participate in activities developing common loyalties, mutual benefits, and mutual interests. Separately chartered associational groups can establish a single common bond relationship if they are integrally related and share common goals and purposes. For example, two or more churches of the same denomination, Knights of Columbus Councils, or locals of the same union can qualify as a single associational common bond.

Individuals and groups eligible for membership in a single associational credit union can include the following:

  • Natural person members of the association (for example, members of a union or church members);
  • Non-natural person members of the association;
  • Employees of the association (for example, employees of the labor union or employees of the church); and
  • The association.

Generally, a single associational common bond does not include a geographic definition and can operate nationally. However, a proposed or existing federal credit union may limit its field of membership to a single association or geographic area. NCUA may impose a geographic limitation if it is determined that the applicant credit union does not have the ability to serve a larger group or there are other operational concerns. All single associational common bonds should include a definition of the group that may be served based on the association's charter, bylaws, and any other equivalent documentation.

The common bond for an associational group cannot be established simply on the basis that the association exists. In determining whether a group satisfies associational common bond requirements for a federal credit union charter, NCUA will consider the totality of the circumstances, which includes:

  • Whether members pay dues;
  • Whether members participate in the furtherance of the goals of the association;
  • Whether the members have voting rights. To meet this requirement, members need not vote directly for an officer, but may vote for a delegate who in turn represents the members’ interests;
  • Whether the association maintains a membership list;
  • Whether the association sponsors other activities;
  • The association's membership eligibility requirements; and
  • The frequency of meetings

A support group whose members are continually changing or whose duration is temporary may not meet the single associational common bond criteria. Each class of member will be evaluated based on the totality of the circumstances. Individuals or honorary members who only make donations to the association are not eligible to join the credit union.

Educational groups -- for example, parent-teacher organizations, alumni associations, and student organizations in any school -- and church groups may constitute associational common bonds.

Student groups (e.g., students enrolled at a public, private, or parochial school) may constitute either an associational or occupational common bond. For example, students enrolled at a church sponsored school could share a single associational common bond with the members of that church and may qualify for a federal credit union charter. Similarly, students enrolled at a university, as a group by itself, or in conjunction with the faculty and employees of the school, could share a single occupational common bond and may qualify for a federal credit union charter.

The terminology “Alumni of Jacksonville State University” is insufficient to demonstrate an associational common bond. To qualify as an association, the alumni association must meet the requirements for an associational common bond. The alumni of a school must first join the alumni association, and not merely be alumni of the school to be eligible for membership.

Homeowner associations, tenant groups, consumer groups, and other groups of persons having an “interest in” a particular cause and certain consumer cooperatives may also qualify as an association.

Associations based primarily on a client-customer relationship do not meet associational common bond requirements. However, having an incidental client-customer relationship does not preclude an associational charter as long as the associational common bond requirements are met. For example, a fraternal association that offers insurance, which is not a condition of membership, may qualify as a valid associational common bond.

Applicants for a single associational common bond federal credit union charter or a field of membership amendment to include an association must provide, at the request of the regional director, a copy of the association's charter, bylaws, or other equivalent documentation, including any legal documents required by the state or other governing authority.

The associational sponsor itself may also be included in the field of membership -- e.g., “Sprocket Association” -- and will be shown in the last clause of the field of membership.

Sample Single Associational Common Bonds

Some examples of associational common bonds are:

  • Regular members of Locals 10 and 13, IBEW, in Florida, who qualify for membership in accordance with their charter and bylaws in effect on May 20, 2001;
  • Members of the Hoosier Farm Bureau in Grant, Logan, or Lee Counties of Indiana, who qualify for membership in accordance with its charter and bylaws in effect on March 7, 1997;
  • Members of the Shalom Congregation in Chevy Chase, Maryland;
  • Regular members of the Corporate Executives Association, located in Westchester, New York, who qualify for membership in accordance with its charter and bylaws in effect on December 1, 1997;
  • Members of the University of Wisconsin Alumni Association, located in Green Bay, Wisconsin;
  • Members of the Marine Corps Reserve Officers Association; or
  • Members of St. John’s Methodist Church and St. Luke’s Methodist Church, located in Toledo, Ohio.

Some examples of insufficiently defined single associational common bonds are:

  • All Lutherans in the United States. (too broadly defined); or
  • Veterans of U.S. military service. (group is too broadly defined; no formal association of all members of the group).

Some examples of unacceptable single associational common bonds are:

  • Alumni of Amos University. (no formal association);
  • Customers of Fleetwood Insurance Company. (policyholders or primarily customer/client relationships do not meet associational standards);
  • Employees of members of the Reston, Virginia Chamber of Commerce. (not a sufficiently close tie to the associational common bond); or
  • Members of St. John’s Lutheran Church and St. Mary’s Catholic Church located in Anniston, Alabama. (churches are not of the same denomination).

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