Expanding a credit union’s field of membership (FOM) is one of the most effective strategies for sustainable growth. Yet because credit union charter rules are dense and technical, many institutions stick with what they know, often overlooking opportunities to serve far more people.
At CUCollaborate, our mission is to help credit unions expand their charters strategically and unlock new membership opportunities. One of the most underutilized tools is the Federal Multiple Common Bond (MCB) charter, particularly when paired with Underserved Area additions. This combination can extend a credit union’s reach well beyond the limits of traditional state or federal community charters.
In this article, we’ll cover:
- A primer on chartering and field of membership expansion
- How underserved areas work as a growth mechanism
- Key considerations for credit unions exploring a charter conversion to Federal MCB
- Why credit union consulting support is critical for navigating this process
Chartering and Field of Membership: The Basics
Every credit union is governed by its charter type, state or federal, which defines who it can serve. For community charters, the NCUA’s Field of Membership Manual outlines population thresholds:
- Up to 1 million people for rural districts
- Up to 2.5 million people for metropolitan communities
While state charters can sometimes be more flexible, they create challenges if a credit union wants to expand across state lines. Community charters are valuable for reinforcing local ties, but they often become restrictive when credit unions want to pursue regional or national growth strategies.
Related reading: You Can’t Talk Growth Without Talking Charters
Why Multiple Common Bond Credit Unions Deserve a Second Look
When a credit union approaches the ceiling of its community charter or seeks cross-state expansion, the Federal Multiple Common Bond charter can provide the answer.
Most MCB charters grow by adding Select Employee Groups (SEGs). However, the real power comes from the ability to designate underserved areas, a strategy many credit unions overlook.
Unlike community charters, there is no limit to the number of underserved areas an MCB credit union can adopt. This flexibility makes it possible to serve populations that exceed the size of even the most generous community charters.
Learn more: Multiple Common Bond Charter Overview
Underserved Areas: Expanding Access and Inclusion
Underserved areas were created to promote financial inclusion. Federal MCB credit unions can expand into these communities if they demonstrate both intent and capacity to serve them.
To qualify, an underserved area must:
- Meet the NCUA definition of a community or rural district
- Show signs of economic distress (for example, high poverty or unemployment)
- Lack adequate service from traditional banks or credit unions
With the right data analysis and mapping, these hurdles are manageable. For example, CUCollaborate has helped clients use census tract-level data and facility anchors (like branches) to build compliant underserved area expansions that support long-term growth.
Explore further: The Value of a Multiple Common Bond
Real-World Example: Growth Through Charter Conversion
One credit union we advised had maximized its federal community charter and needed to serve members across state borders. By modeling underserved areas with demographic precision, we were able to reconstruct its market under a Federal MCB charter while retaining the original footprint and unlocking new opportunities.
The strategy required:
- Granular geographic mapping at the census tract level
- Facility-based modeling to anchor underserved areas
- Scenario testing to optimize expansion opportunities
This process ultimately created a path for sustainable growth that would have been impossible under a community charter.
Resource: Federal Community Charter to Multiple Common Bond Conversion Checklist
Challenges and Considerations
Of course, pursuing underserved areas is not simple. It requires:
- Sophisticated regulatory modeling
- A deep understanding of NCUA’s chartering criteria
- Careful sequencing of applications and expansions
Geography matters too. In some states, underserved areas can be combined to create statewide coverage. In others, maps are more fragmented, requiring additional nuance. That is why expert credit union consulting is often essential to get this right.
Related blog: How a Multiple Common Bond Charter Can Help with Bank Purchases and Mergers
Is a Multiple Common Bond Strategy Right for Your Credit Union?
Your credit union should explore this strategy if:
- You have outgrown your community charter or are near population limits
- You want to expand across multiple states
- Your mission emphasizes serving financially underserved populations
- You are exploring a charter conversion as part of a long-term growth plan
If these scenarios apply, a Federal MCB charter with underserved areas could help you expand strategically while staying true to your mission.
Next step: Field of Membership Consulting Services
Final Thoughts: Expanding Beyond Limits
Underserved areas give Multiple Common Bond credit unions the power to expand field of membership responsibly and inclusively. When combined with expert charter consulting and data-driven analysis, they create opportunities that many leaders do not even realize are possible.
For credit unions ready to think beyond the limits of community charters, this is more than just compliance. It is a way to build growth, financial inclusion, and long-term sustainability.
At CUCollaborate, we help credit unions navigate charter conversions, optimize field of membership expansion, and strategically grow membership. If you are ready to explore what is possible, let’s start the conversation.
Field of Membership Expansion
