Learn about the Single Occupational Common Bond Charter and its various components along with the Field of Membership opportunities it could offer your credit union.
What is a Single Occupational Common Bond Charter?
The National Credit Union Administration (NCUA)’s Chartering and Field of Membership (FOM) Manual describes the designation as applying to: “A credit union whose field of membership consists of employees of the same entity or related entities or part of a Trade, Industry, or Profession (TIP).”
While there is no geographic limitation attached to this type of charter, a physical area may still be included for the purpose of specifying a field of membership.
NB: We go further in depth on TIP Charters on a separate page.
Who Can Join a Single Occupational Common Bond Credit Union?
The NCUA Manual further stipulates that “[a] single occupational common bond federal credit union may include in its field of membership all persons and entities who share that common bond,” which itself can be established by five eligibility criteria:
–Employment (or a contractual relationship equivalent to employment) in a single corporation or other legal entity makes that person part of a single occupational common bond;
–Employment in a corporation or other legal entity with a controlling ownership interest (which shall not be less than 10 percent) in or by another legal entity makes that person part of a single occupational common bond;
–Employment in a corporation or other legal entity which is related to another legal entity (such as a company under contract and possessing a strong dependency relationship with another company) makes that person part of a single occupational common bond;
–Employment or attendance at a school makes that person part of a single occupational common bond; or
–Employment in the same Trade, Industry, or Profession (TIP).
Example Fields of Membership
The NCUA Manual outlines what sample FOMs could look like:
–Employees of the Hunt Manufacturing Company who work in West Chester, Pennsylvania. (common bond - same employer with geographic definition);
–Employees of the Buffalo Manufacturing Company who work in the United States. (common bond - same employer with geographic definition);
–Employees, elected and appointed officials of municipal government in Parma, Ohio. (common bond - same employer with geographic definition);
–Employees of Johnson Soap Company and its majority owned subsidiary, Johnson Toothpaste Company, who work in, are paid from, are supervised from, or are headquartered in Augusta and Portland, Maine. (common bond - parent and subsidiary company with geographic definition);
–Employees of MMLLJS contractor who work regularly at the U.S. Naval Shipyard in Bremerton, Washington. (common bond - employees of contractors with geographic definition);
–Employees, doctors, medical staff, technicians, medical and nursing students who work in or are paid from the Newport Beach Medical Center, Newport Beach, California. (single corporation with geographic definition);
–Employees of JLS, Incorporated and MJM, Incorporated working for the LKM Joint Venture Company in Catalina Island, California. (common bond - same employer - ongoing dependent relationship);
–Employees of and students attending Georgetown University. (common bond - same occupation);
–Employees of all the schools supervised by the Timbrook Board of Education in Timbrook, Georgia. (common bond - same employer); or
–All licensed nurses in Fairfax County, Virginia. (occupational common bond TIP).
It also shares two examples of insufficiently defined single occupational common bonds:
–Employees of manufacturing firms in Seattle, Washington. (no defined occupational sponsor; overly broad TIP);
–Persons employed or working in Chicago, Illinois. (no occupational common bond).
The Application Process
While a Single Occupational Common Bond Charter can be greatly beneficial to many credit unions looking to expand or covert an existing charter, it is by no means a one-size-fits-all process. Identifying the best strategy for your credit union can be both difficult and time-consuming. At CUCollaborate, we provide a tailored approach to growth based on data-driven insights and specialized software to help credit unions reach the largest target market possible.
Contact us today to learn about our Field of Membership Consulting Services or click below to meet directly with a member of our team for an Opportunity Assessment for your credit union.