Open membership associations may lead to long-term growth

For many credit unions, the options to expand their field of membership (FOM) are limited and heavily regulated. Multiple-common bond credit unions, as a result, are increasingly turning to adding an open membership association to their charter. Historically, credit unions with an open membership association have received a great deal of scrutiny from the NCUA and bankers, being the subject of controversy from banks and credit unions, alike. However, armed with a clarifying memo issued by the NCUA in September 2013, credit unions obtained clear directions and guidelines to move forward with all the potential benefits that come with adding an open membership association.

To determine the breadth and scope of possible benefits that come along with the addition of an open membership association, CUCollaboratefollowed the journey of three federal multiple common bond credit unions. All three credit unions added the American Consumer Council (ACC) to their respective charters, effective August 27th, 2010. The expected benefits of adding the ACC were to be able to grow the credit unions’ respective memberships in terms of individual members and savings accounts, while significantly increasing the credit unions’ total assets.

When adding an association with the goal of growing membership, open membership associations can provide credit unions with the most value. With minimal qualifications to join an association, organizations such as the ACC remove or lessen the burden of credit union membership eligibility.

 

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