Credit Union Field of Membership Expansion

Why Expand?

A credit union's field of membership is the legal definition of who is eligible to join. A credit union would want to expand their field of membership so that they can service a larger potential membership base. There are two types of credit unions: federal and state. A federal chartered credit union operates under one of three kinds of charters: single common bond, multiple common bond, or community. A state chartered credit union can be a community charter or a single common bond. Some states have more progressive charters.

Charter Types

The type of charter a credit union holds will dictate the different expansion options there are for that credit union. There is an opportunity to convert charters which may benefit a credit union's expansion. Below are the different charter types currently available.

  • Occupational common-bond– an employer-based group or persons employed within a Trade, Industry or Profession;
  • Associational common bond  – a member-based group meeting the NCUA’s threshold requirement and totality of circumstances test;
  • Community – a geographic area meeting the NCUA’s definition of a well-defined local community or rural district; and

  • Multiple Common Bond- A federal credit union may be chartered to serve a combination of distinct, definable single occupational and/or associational common bonds.


Credit Union Expansion Options

There are multiple ways to expand a credit union's field of membership. The way a credit union expands depends on what their growth goals are. Below are some different options for expanding a credit union's field of membership. 


  1. Adding an association or select employee group-As federal credit unions seek to expand their fields of membership, more and more credit unions are adding associations to their fields of membership. The American Consumer Council is the most popular association credit unions have leveraged to open their fields of membership up to anyone who joins the council. 

  2. Adding a low income designation-LICU designation provides field of membership expansion benefits. Low-income, multiple common bond credit unions are able to create low-income associations to help low-income people and add them as members, helping to alleviate poverty in your area.
  3. Converting a credit union's charter- In order to expand your credit union's field of membership, you may have to change charter types. You may want to switch from state chartered to federally chartered or vice versa. This conversion could allow you to access new field of membership expansion opportunities. 
  4. Adding Underserved Areas- An underserved area is a geographic area meeting the NCUA’s underserved area requirements available to only multiple common bonds.

  5. Acquire or merge with another financial institution- Credit unions can expand their field of membership by acquiring or merging with either a credit union or bank. If a credit union merges with another credit union then it would adopt that credit union's field of membership.