How Do I Start A Credit Union?
Credit unions need a charter — a license to operate — from either the National Credit Union Administration or a state credit union regulator. The federal government and state governments have different chartering rules and requirements.
Credit unions are cooperatives, meaning they are member-owned and operated. Federally chartered credit unions must have an NCUA-approved field of membership, which is the legal description of the persons, organizations, and other entities the credit union will serve.
Can I Start a Federal Credit Union?
Yes!
A federally chartered credit union is a great way to create access to affordable financial services to people where you work or worship, members of an association where you belong, or people in your community.
At the beginning of the chartering application process, organizers discuss the need for a credit union and consider these four questions:
- What is the purpose and core values of the proposed credit union?
- Who do you want to serve (your field of membership)?
- Do you have adequate capital?
- Do you have a team of people to help the credit union start (also known as subscribers)?
Review our Federal Credit Union Charter Application Guide to help you understand the chartering process.
This chart summarizes that process:
Chartering Application Guide Flowchart
Phase 1 – Proof of Concept
During this phase you will:
- Research chartering a federal credit union
- Define the credit union’s purpose
- Define the field of membership
- Describe capital funding plans
- Identify subscribers
- Select a credit union name
- Research low-income and minority depository institution designations and Community Development Financial Institution certification
- Complete the proof of concept submission
CURE Review Goal: 60 Days
Phase 2 – Charter Application
During this phase you will:
- Complete pre-planning
- Conduct a potential member survey and analyze the results
- Analyze market conditions
- Secure donated capital
- Obtain evidence of critical sponsor commitments
- Secure mentor relationships
- Develop your business plan
- Submit NCUA form 4001
- Create a mission statement
- Determine products and services
- Establish organizational and management plans
- Identify the credit union’s physical location
- Create pro forma financial statements and plans for operating independently
- Describe your marketing plans
- Create proposed bylaws
- Prepare all required policies, including those for major operational areas or advanced services
Phase 3 – Final NCUA Approval
During this phase you will:
- Submit all remaining NCUA forms
- NCUA 4008
- NCUA 9500
- NCUA 9501
- NCUA 4012 forms not previously submitted
and approved
- Sign the Letter of Understanding and Agreement with NCUA
- Receive your charter and share insurance coverage
CURE Review Goal: 180 days from receipt of a complete application in Phase 2 to charter issuance
How Do I Submit My Proof of Concept and Other Forms?
Organizers can begin the process for starting a credit union by completing the Phase 1 Proof of Concept and submitting it online. Access the Proof of Concept form. We recommend you print the form and save it. Please note the data is NOT saved if you exit the form before you submit it. It must be completed in one session.
When your form is complete, you may submit it one of two ways:
- Email the form to NewFCU@ncua.gov, or
- Transfer the data to the online Proof of Concept form once you have completed all sections, then submit it online using the “submit” button.
The Proof of Concept documentation covers the four critical application elements:
- Purpose and core values,
- Field of membership,
- Capital funding plan, and
- Subscribers.
Applicants can always complete and submit the forms in the order described in the Chartering Manual instead of using the Proof of Concept tool. If an applicant opts to use the Proof of Concept tool, they should refer to the Federal Credit Union Charter Application Guide for the necessary steps to complete the process in that form.
Once you submit the Proof of Concept, an NCUA coordinator will be assigned to work with you throughout the chartering process. Documents submitted in Phases 2 and 3 of the process will be submitted to the coordinator.
Please contact the NCUA’s Office of Credit Union Resources and Expansion at 703.518.1150 or NewFCU@ncua.gov for guidance on starting a new federal credit union. A CURE staff member can discuss in greater detail with you the phased approach for starting a credit union and answer your questions concerning your specific proposed federal credit union.
Additional Chartering Resources
Pro-Forma Financial Statement Projections Template
Pro-Forma Financial Statement Projection Assumptions
NCUA and External Chartering Resources
New Charter Application Checklist