Back to Basics: Businesses and field of membership

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Last week, our compliance team hosted compliance professionals from across the country in San Antonio for our Compliance School and Compliance Seminar. It was a busy but very successful week. Congratulations to all the new NCCOs!

Since Compliance School is all about the compliance basics, today’s blog focuses on the basics of businesses and field of membership (FOM) for federal credit unions. Like any member, a business must also qualify for membership by being within your FOM, paying par value and meeting any other membership requirements the credit union has imposed. Under the federal field of membership rules, there are three options for how businesses can be within your FOM.

First, the credit union’s charter specifically lists the business name. This is most common for SEGs where the employer is listed in the FOM so it can also open an account. The credit union will need to review section 5 of its charter to determine whether the business is listed there. If so, then it is within your FOM and the business may open an account.

Second, your charter includes the phrase “organizations of such persons.” An “organization of such persons” is an organization that is composed exclusively of persons within the federal credit union’s field of membership. See, Chartering and Field of Membership Manual, Appendix 1 Glossary. The persons that make up the organization or own the business do not have to actually be members of the credit union, however, they must all be within your field of membership.


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