Section B – Multiple Common Bond Charters (MCB)

As the name indicates, a multiple common bond charter serves multiple entities.  Each entity has its own common bond, but each does not share the same SCB with the other entities.  For example, if a SCB credit union adds a group that does not share the same single common bond as the original group, it will essentially convert from an SCB charter to a MCB charter.

Multiple common bonds may be occupational or associational or a combination of both occupational and associational groups.  A MCB charter with occupational and associational groups could potentially serve all of these entities: members and employees of a religious entity, employees of XYZ Company, members and employees of a labor union, and employees and students of ABC school district.

An MCB charter serving occupational or associational groups, or a combination of these groups, can also add an underserved area to its charter.  Section B.3 contains additional information on underserved areas.  An underserved area is a community meeting the requirements of the Community Development Financial Institution Act as an investment area, and the area meets other criteria outlined in the Chartering Manual, Chapter 3, Section III.  These geographic areas are generally defined as a county for non-metropolitan areas or by census tracts for metropolitan areas.  More information on investment areas can be found at www.cdfifund.gov.

MCB Service Area

Each of the MCB groups must be located within the service area of the PFCU’s service facilities.  Service area is generally defined in the Chartering and Field of Membership Manual as the area that can reasonably be served by the service facilities accessible to the groups within the field of membership. 

Each group as a whole is within the service area when:

• A majority of the people in a select group live, work, or gather regularly within the service area;
• The group’s headquarters is located within the service area; or
• The group’s “paid from” or “supervised from” location is within the service area.

Although “service area” is not defined by a specific distance in the NCUA’s regulations, in most parts of the country groups should generally be within a 25-mile radius of the anticipated service facility.  NCUA generally uses this informal guideline but will consider whether the group meets the service area requirement on a case-by-case basis.  If necessary, you should provide additional support that shows the credit union can service a group outside of the 25-mile radius.  Internet access to the PFCU is not sufficient support.  Service area and service facilities are further defined in Chapter 2, Article IV.A.1 of the Chartering Manual.

If necessary, you should provide additional support that shows the credit union can service a group outside of the 25-mile radius.

Documentation Required for Section B

• In the field-of-membership section, identify the field of membership type(s) the PFCU wants to serve (select from the following – B.1, B.2, or B.3), and attach the required documentation for your selection. If the field of membership will include a combination of occupational and associational groups and/or an underserved area, provide the information listed below in B.1, B.2, B.3 applicable to each type of group.

Documentation for B.1 – Multiple Common Bond Charter – Occupational

• Identify each entity by name.
• Provide a letter from an authorized representative of each entity, on its letterhead, stating it is interested in providing credit union access to the association’s membership.  The letter must also include:
  • Number of current employees
    • If any single group being included has between 3,000 and 4,999 members, there are additional requirements.  See Appendix B to Part 701 Section IV.B.3—Documentation Requirements for details.
    • If any single group being included has 5,000 or more members, there are additional requirements.  See Appendix B to Part 701 Section IV.B.3—Documentation Requirements for details.
    • Physical address and telephone number of the entity
    • Distance (in miles) from the entity’s physical address to the PFCU’s service facility or shared branching location

Documentation for B.2 – Multiple Common Bond Charter – Associational

• Identify each entity by name.
• Provide a letter from an authorized representative of each entity, on its letterhead, stating it is interested in providing credit union access to the association’s membership.  The letter must also include:
  • Number of current members and the association’s employees
    • If any single group being included has between 3,000 and 4,999 members, there are additional requirements.  See Appendix B to Part 701 Section IV.B.3–Documentation Requirements for details.
    • If any single group being included has 5,000 or more members, there are additional requirements.  See Appendix B to Part 701 Section IV.B.3–Documentation Requirements for details.
  • Physical address and telephone number of the association
  • Distance (in miles) from the association’s physical address to the PFCU’s service facility or shared branching location
• Provide a copy of the association’s Bylaws and Articles of Incorporation, Constitution, Charter, or other equivalent documentation supporting that it is a recognized entity.

Documentation for B.3 – Multiple Common Bond Charter – Underserved Area

If an underserved area is being considered, the NCUA is available to assist with determining whether an area meets the underserved area requirements.  See Letter to Federal Credit Unions 21-FCU-03 Underserved Area Expansions for additional information.

• Provide the following information about the underserved area:
  • Name and/or a description of the underserved area (including the census tracts encompassing the requested area)
  • Population of the underserved area
  • CDFI Investment Area map obtained from https://www.cdfifund.gov/mapping-system demonstrating the requested area qualifies
  • CDFI Investment Area Report obtained from https://www.cdfifund.gov/mapping-system showing how the requested area meets the investment area criteria
  • Documentation supporting the PFCU meets the MCB requirements for adding an underserved area:
    • Two or more single common bond groups are to be included in the proposed field of membership
    • A service facility is in the underserved area or will be established and maintained in the area within two years (see Chapter 3 Section III.F. definition in the Chartering Manual)
    • The requested area is underserved by other depository institutions as defined by NCUA Regulations Part 701, Appendix B–Chartering and Field of Membership Manual (Chapter 3 III.B.3).  The NCUA will assist with this requirement once a CDFI map and investment area report are obtained. Contact CURE for assistance with computing a concentration of facilities ratio and satisfying this requirement
    • One-page narrative titled “Significant Unmet Needs” documenting the unmet financial needs in the requested area and how the PFCU will meet those unmet needs.  Contact CURE for assistance with satisfying this requirement