12 USC 1759 - Membership

U.S Code last checked for updates: Nov 22, 2024

§ 1759.

Membership

(a)

In general

(b)

Membership field

Subject to the other provisions of this section, the membership of any Federal credit union shall be limited to the membership described in one of the following categories:

(1)

Single common-bond credit union

(2)

Multiple common-bond credit union

More than one group—

(A)

each of which has (within the group) a common bond of occupation or association; and

(B)

the number of members, each of which (at the time the group is first included within the field of membership of a credit union described in this paragraph) does not exceed any numerical limitation applicable under subsection (d).

(3)

Community credit union

(c)

Exceptions

(1)

Grandfathered members and groups

(A)

In general

Notwithstanding subsection (b)—

(i)

any person or organization that is a member of any Federal credit union as of August 7, 1998, may remain a member of the credit union after August 7, 1998; and

(ii)

a member of any group whose members constituted a portion of the membership of any Federal credit union as of August 7, 1998, shall continue to be eligible to become a member of that credit union, by virtue of membership in that group, after August 7, 1998.

(B)

Successors

(2)

Exception for underserved areas

Notwithstanding subsection (b), in the case of a Federal credit union, the field of membership category of which is described in subsection (b)(2), the Board may allow the membership of the credit union to include any person or organization within a local community, neighborhood, or rural district if—

(A)

the Board determines that the local community, neighborhood, or rural district—

(i)

is an “investment area”, as defined in section 4702(16) of this title, and meets such additional requirements as the Board may impose; and

(ii)

is underserved, based on data of the Board and the Federal banking agencies (as defined in section 1813 of this title), by other depository institutions (as defined in section 461(b)(1)(A) of this title); and

(B)

the credit union establishes and maintains an office or facility in the local community, neighborhood, or rural district at which credit union services are available.

(d)

Multiple common-bond credit union group requirements

(1)

Numerical limitation

(2)

Exceptions

In the case of any Federal credit union, the field of membership category of which is described in subsection (b)(2), the numerical limitation in paragraph (1) of this subsection shall not apply with respect to—

(A)

any group that the Board determines, in writing and in accordance with the guidelines and regulations issued under paragraph (3), could not feasibly or reasonably establish a new single common-bond credit union, the field of membership category of which is described in subsection (b)(1) because—

(i)

the group lacks sufficient volunteer and other resources to support the efficient and effective operation of a credit union;

(ii)

the group does not meet the criteria that the Board has determined to be important for the likelihood of success in establishing and managing a new credit union, including demographic characteristics such as geographical location of members, diversity of ages and income levels, and other factors that may affect the financial viability and stability of a credit union; or

(iii)

the group would be unlikely to operate a safe and sound credit union;

(B)

any group transferred from another credit union—

(i)

in connection with a merger or consolidation recommended by the Board or any appropriate State credit union supervisor based on safety and soundness concerns with respect to that other credit union; or

(ii)

by the Board in the Board’s capacity as conservator or liquidating agent with respect to that other credit union; or

(C)

any group transferred in connection with a voluntary merger, having received conditional approval by the Administration of the merger application prior to October 25, 1996, but not having consummated the merger prior to October 25, 1996, if the merger is consummated not later than 180 days after August 7, 1998.

(3)

Regulations and guidelines

(e)

Additional membership eligibility provisions

(1)

Membership eligibility limited to immediate family or household members

(2)

Retention of membership

(f)

Criteria for approval of expansion of multiple common-bond credit unions

(1)

In general

The Board shall—

(A)

encourage the formation of separately chartered credit unions instead of approving an application to include an additional group within the field of membership of an existing credit union whenever practicable and consistent with reasonable standards for the safe and sound operation of the credit union; and

(B)

if the formation of a separate credit union by the group is not practicable or consistent with the standards referred to in subparagraph (A), require the inclusion of the group in the field of membership of a credit union that is within reasonable proximity to the location of the group whenever practicable and consistent with reasonable standards for the safe and sound operation of the credit union.

(2)

Approval criteria

The Board may not approve any application by a Federal credit union, the field of membership category of which is described in subsection (b)(2) to include any additional group within the field of membership of the credit union (or an application by a Federal credit union described in subsection (b)(1) to include an additional group and become a credit union described in subsection (b)(2)), unless the Board determines, in writing, that—

(A)

the credit union has not engaged in any unsafe or unsound practice (as defined in section 1786(b) of this title) that is material during the 1-year period preceding the date of filing of the application;

(B)

the credit union is adequately capitalized;

(C)

the credit union has the administrative capability to serve the proposed membership group and the financial resources to meet the need for additional staff and assets to serve the new membership group;

(D)

any potential harm that the expansion of the field of membership of the credit union may have on any other insured credit union and its members is clearly outweighed in the public interest by the probable beneficial effect of the expansion in meeting the convenience and needs of the members of the group proposed to be included in the field of membership; and

(E)

the credit union has met such additional requirements as the Board may prescribe, by regulation.

(g)

Regulations required for community credit unions

(1)

Definition of well-defined local community, neighborhood, or rural district

The Board shall prescribe, by regulation, a definition for the term “well-defined local community, neighborhood, or rural district” for purposes of—

(A)

making any determination with regard to the field of membership of a credit union described in subsection (b)(3); and

(B)

establishing the criteria applicable with respect to any such determination.

(2)

Scope of application

(June 26, 1934, ch. 750, title I, § 109, formerly § 9, 48 Stat. 1219; July 31, 1946, ch. 711, § 2, 60 Stat. 744; 1947 Reorg. Plan No. 1, § 401, eff. July 1, 1947, 12 F.R. 4534, 61 Stat. 952; June 29, 1948, ch. 711, §§ 1, 2, 62 Stat. 1091; renumbered § 10 and amended Pub. L. 86–354, § 1, Sept. 22, 1959, 73 Stat. 631; Pub. L. 91–206, § 2(1), Mar. 10, 1970, 84 Stat. 49; renumbered title I, § 109, Pub. L. 91–468, § 1(2), Oct. 19, 1970, 84 Stat. 994; amended Pub. L. 93–383, title VII, § 722, Aug. 22, 1974, 88 Stat. 719; Pub. L. 95–630, title V, § 502(b), Nov. 10, 1978, 92 Stat. 3681; Pub. L. 105–219, title I, §§ 101–103, Aug. 7, 1998, 112 Stat. 914–917; Pub. L. 109–351, title VII, § 726(9), Oct. 13, 2006, 120 Stat. 2002.)

cite as: 12 USC 1759