Occupational Common Bond Overview

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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. We go into more detail on TIP charters here.

A single occupational common bond federal credit union may include in its field of membership all persons and entities who share that common bond. NCUA permits a person’s membership eligibility in a single occupational common bond group to be established in five ways:

  • Employment (or a long-term 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) (see Trade Industry Profession Charter).

A geographic limitation is not a requirement for a single occupational common bond. However, for purposes of describing the field of membership, the geographic areas being served may be included in the charter. For example:

  • Employees, officials, and persons who work regularly under contract in Miami, Florida for ABC Corporation and subsidiaries;
  • Employees of ABC Corporation who are paid from...;
  • Employees of ABC Corporation who are supervised from...;
  • Employees of ABC Corporation who are headquartered in...; and/or
  • Employees of ABC Corporation who work in the United States.

The corporation or other legal entity (i.e., the employer) may also be included in the common bond - e.g., “ABC Corporation.” The corporation or legal entity will be defined in the last clause in Section 5 of the credit union’s charter. A charter applicant must provide documentation to establish that the single occupational common bond requirement has been met. Some examples of single occupational common bonds are:

  • Employees of the Hunt Manufacturing Company who work in West Chester, Pennsylvania. (common bond - same employer with geographic definition); CHAPTER 2 OCCUPATIONAL COMMON BOND 2-3
  • 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

Some examples of insufficiently defined single occupational common bonds are:

  • 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);

March 05, 2019

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