With the NCUA’s associational common bond rule taking effect Monday, the agency has sent a letter to federal credit unions with guidance on the rule.
The NCUA board approved the new field-of-membership (FOM) rule at its April 30 meeting. It allows automatic FOM approval of 12 categories of associations: alumni associations; religious organizations; electric cooperatives; homeowner associations; labor unions; scouting groups; parent-teacher associations at the local level; chamber of commerce groups; athletic booster clubs; fraternal organizations; organizations with a cultural mission; and organizations promoting bonds among a common profession.
For associations that do not qualify for the above categories, the NCUA has streamlined the approval process.
According to the agency, the four most important criteria it will consider to approve a valid association for FOM are:
- 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