Multiple Common Bond Credit Union Charter Overview

Learn about the Multiple Common Bond Charter and its various components along with the Field of Membership opportunities it could offer your credit union.

What Is a Multiple Common Bond Charter?

As defined in the National Credit Union Administration (NCUA)’s Chartering and Field of Membership (FOM) Manual, the Multiple Common Bond (MCB) Charter covers “a credit union [serving] more than one group, each of which has a common bond of occupation and/or association.”

A major distinction between this and the Single Common Bond is that the MCB can be either occupational or associational, or a combination of both.

The charter does generally carry a geographic limitation, as the groups themselves must be physically located within the service area of, and have access to, one of the credit union’s service facilities.

Who Is Eligible to Join a Multiple Common Bond Credit Union?

Select Groups

As stipulated in the NCUA Manual, a Multiple Common Bond credit union may “serve a combination of distinct, definable single occupational and/or associational common bonds.” These groups that make up the FOM are referred to as Select Groups or Select Employee Groups (SEGs), and each must have its own established associational or occupational bond.

These groups themselves however need not be affiliated, as an MCB credit union may serve two unrelated employers, or two unrelated associations, or a combination of two or more employers or associations.

Underserved Areas

A Multiple Common Bond Charter also allows for the addition of Undeserved Areas to a Field of Membership. These areas must meet the criteria of an “undeserved area” as defined in the Federal Credit Union Act:

(1) a “local community, neighborhood, or rural district” that (2) meets the definition of an “investment area” under section 103(16) of the Community Development Banking and Financial Institutions Act of 1994 (“CDFI”), 12 U.S.C. 4702(16), and (3) is “underserved by other depository institutions” based on data of the NCUA Board and the federal banking agencies.

Underserved areas can be added to an MCB Charter irrespective of location, with one limitation: an underserved area based on a rural district must be located within either the credit union’s headquarters’ state or adjoining states.

Adding an underserved area is complicated and best done with the assistance of an experienced party. It can provide a tremendous advantage in terms of membership growth, by combining both common bond groups and communities into one charter.

Example Fields of Membership

The NCUA Manual provides sample MCB Fields of Membership:

1. Employees of Teltex Corporation who work in Wilmington, Delaware; 

2. Partners and employees of Smith & Jones, Attorneys at Law, who work in Wilmington, Delaware;

3. Members of the M&L Association in Wilmington, Delaware, who qualify for membership in accordance with its charter and bylaws in effect on December 31, 1997;

4. Employees of tenants of MJB Office Park under the following conditions:

- Each tenant’s employees form an individual occupational group;

- the tenant has fewer than 3,000 employees working at MJB Office Park; and

- those employees work in MJB Office Park’s Wilmington, Delaware location.

The Application Process

While an MCB 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.