Section A – Single Common Bond Charter (SCB)

A single common bond can be occupational (employees of an entity or a trade, industry, or profession) or associational (members and employees of an association).

Documentation Required for Section A

• In the POC field of membership section, identify the field of membership the PFCU wants to serve (select one of the below – A.1, A.2, or A.3), and upload the required documentation for your selection as an attachment to the POC.

A-1 - Occupational SCB

An occupational single common bond charter can be established by persons who share an employment relationship with a single legal entity or several entities under common ownership. This charter could potentially serve employees of XYZ Company or, alternatively, employees of the XYZ Company and all the subsidiary companies of XYZ Company.¹

• In conjunction with the field of membership section, you will send, as an email attachment to NewFCU@ncua.gov, a letter from the entity, on its letterhead, stating it is interested in providing credit union access to the company’s employees. The letter must be signed by an individual authorized to represent the entity and must include the following:
  • Entity’s name;
  • Physical address;
  • Telephone number; and
  • Number of employees.

A-2 - Trade, Industry, or Profession

A TIP charter is a single occupational common bond based on employment in a trade, industry, or profession, which can include several legal entities that share a common purpose or characteristic. Even though these entities are not under common ownership, they have a common bond by virtue of producing similar products, providing a similar service, or participating in the same type of business. This charter could potentially serve textile workers (a trade); employees of the healthcare industry, the airline industry, or in the federal government (an industry); or doctors, realtors, or teachers (a profession) located in a specific geographic area.

You can access the NCUA’s TIP Report to find previously approved TIPs. The organizing group may consider using one of the pre-approved TIPs and the related FOM wording.

For new TIPs, the FOM wording must be approved by the NCUA. Contact the NCUA for assistance in developing new TIPs. The pre-approved TIP wording can be used as a guide for developing a new TIP’s wording.

• If you are requesting a TIP, include the following information in the POC field of membership section:
  • Name of proposed trade, industry, or profession;
  • Number of employees in TIP and independent documentation to support the number;
  • Geographic area to be served;
  • Discussion of previously approved TIP by the NCUA, if applicable; and
  • Description of how membership eligibility will be verified, such as a pay stub, employment badge, information provided by a Human Resources.

A-3 - Associational SCB

An associational SCB charter may include in its FOM, regardless of location, all members and employees of a recognized association. The association’s common bond consists of individuals and groups whose members participate in activities developing common loyalties, mutual benefits, and mutual interests. This charter could potentially serve members and employees of one religious entity or, alternatively, members and employees from a group of religious entities within the same denomination. Other examples of associational based groups are labor unions, homeowner associations, and certain alumni groups.

Associations based primarily on a client-customer relationship—such as fitness clubs or wholesale clubs—do not meet the NCUA’s associational common bond requirements.

A member-based group will not meet the NCUA’s associational common bond requirements if the NCUA determines the association has been formed primarily for the purpose of obtaining credit union membership. The NCUA will consider the totality of circumstances in determining whether the group satisfies its associational common bond requirements.

Documents from the association should reflect whether it meets the following common bond requirements listed in Chapter 2, Section III.A.1 of the Chartering Manual, including:

• Whether the association provides opportunities for members to participate in the furtherance of the goals of the association;
• Whether the association maintains a membership list;
• Whether the association sponsors other activities;
• Whether the association’s membership eligibility requirements are authoritative;
• Whether members pay dues;
• Whether the members have voting rights; to meet this requirement, members need not vote directly for an officer, but may vote for a delegate who in turn represents the members’ interests;
• The frequency of meetings; and
• Separateness – the NCUA reviews whether there is corporate separateness between the group and the federal credit union. The group and the federal credit union must operate in a way that demonstrates the separate corporate existence of each entity. Specifically, this means the federal credit union’s and the group’s respective business transactions, accounts, and corporate records are not intermingled.
• Send, as an email attachment to NewFCU@ncua.gov, a letter from the entity, on its letterhead, stating it is interested in providing credit union access to the association’s membership. The letter must be signed by an individual authorized to represent the entity and must include the following:
  • Entity’s name, physical address, and telephone number;
  • Number of members in the association; and
  • Number of employees in the association, if any.
• Attach a copy of the association’s Bylaws, Articles of Incorporation, Constitution, Charter, or any other equivalent documentation supporting that it is a recognized entity.