Credit Union Charters and Fields of Membership - What Does it All Mean?

Credit unions come in all shapes and sizes. They can be chartered by the state or the federal government.

A quick way to determine which charter your credit union operates under is to look for the word "federal" in its name. All federally chartered credit unions in the United States use the word "federal" in their name.

There are specific benefits under both types of credit union charter (state or federal) so the dual charter system provides credit unions with options and flexibility to ensure the credit union can design itself to best meet its members' needs. While there are unique benefits, remember that all credit unions focus on a membership and not on stockholders. The decisions that are made for a credit union are to benefit the entire membership.

Federally chartered credit unions are regulated by the National Credit Union Administration (NCUA) and insured by the National Credit Union Share Insurance Fund (NCUSIF), which is backed by the full faith and credit of the United States government. While most state-chartered credit unions carry NCUSIF insurance backed by the full faith and credit of the United States government, some are insured by private insurers (that are not backed by the United States government).

For federal credit unions, there are three type of charter based on field of membership:

  1. Single common bond: one group of members having a common bond of occupation or association
  2. Multiple common bond: more than one group of members each having a common bond of occupation or association
  3. Community: members come from a well-defined local community, neighborhood or rural district

It is not uncommon to see successful credit unions, over time, move from having a single common bond field of membership to multiple common bond and, eventually, to community. Indeed, this is a natural evolution of successful and forward-looking credit unions that allows them to continue to grow and prosper thereby allowing them to offer more services and benefits to more and more people. Credit unions offer tremendous benefits to their members and we would love to share with you all the opportunities that Coosa Valley can offer you.

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