12 U.S.C. § 1759 — Membership

(a) In general. Subject to subsection (b), Federal credit^*-union membership consists of the incorporators and other people and incorporated or unincorporated organizations that the Board’s rules allow to be elected as members. Each member must subscribe to at least one share of stock, pay the first installment on it, and pay a uniform entrance fee if the board^* of directors requires one. A member may hold shares jointly with people the member names, with a right for the surviving joint owner to receive the shares. But a joint owner may not vote, get loans, or hold office unless that person^* is within the credit union’s membership field and is otherwise qualified to be a member.

(b) Membership field. Subject to this section’s other rules, a Federal credit union^* may limit its membership to one of these categories:

(1) Single common-bond credit union. One group with a common bond of occupation or association.

(2) Multiple common-bond credit union. More than one group, where (A) each group has its own common bond of occupation or association, and (B) when a group is first added to a credit union’s membership field, the group has no more members than a numerical limit that applies under subsection (d).

(3) Community credit union. People or organizations within a well-defined local community, neighborhood, or rural district. This section does not define “well-defined local community, neighborhood, or rural district”; subsection (g) requires the Board to define it by regulation.

(c) Exceptions.

(1) Grandfathered members and groups.

(A) In general. Despite subsection (b), (i) a person or organization that was a member of a Federal credit union on August 7, 1998, may remain a member after that date; and (ii) a member of a group whose members made up part of a Federal credit union’s membership on that date may continue to become a member of that credit union because of membership in that group.

(B) Successors. If a group’s common bond is defined by a particular organization or business, the rule in subparagraph (A) also continues to apply to that organization’s or business’s successor.

(2) Exception for underserved areas. Despite subsection (b), for a Federal credit union in the multiple-common-bond category, the Board may allow people or organizations in a local community, neighborhood, or rural district to join if the Board decides that the area (A) is an “investment area” as defined in section 4702(16) of this title and meets any additional Board requirements, and (B) is underserved by other depository institutions, based on Board and Federal banking-agency data. The credit union must establish and maintain an office or facility in the area where credit-union services are available.

(d) Multiple common-bond credit-union group requirements.

(1) Numerical limitation. Unless paragraph (2) applies, only a group with fewer than 3,000 members may be added to the membership field of a multiple-common-bond credit union.

(2) Exceptions. The limit does not apply to:

(A) A group that the Board decides in writing, under paragraph (3)’s guidelines and regulations, could not feasibly or reasonably form a new single-common-bond credit union because (i) it lacks enough volunteers or other resources for efficient and effective operation, (ii) it does not meet Board criteria important to likely success, including members’ geographic location, age and income diversity, and other factors affecting financial viability and stability, or (iii) it would be unlikely to operate a safe and sound credit union;

(B) A group transferred from another credit union as part of a merger or consolidation recommended by the Board or an appropriate State^* supervisor because of safety or soundness concerns, or transferred by the Board acting as conservator or liquidating agent; or

(C) A group transferred in a voluntary merger that had conditional Administration^* approval before October 25, 1996, but was not completed by that date, if the merger is completed within 180 days after August 7, 1998.

(3) Regulations and guidelines. After notice and an opportunity for comment, the Board must issue guidelines or regulations stating the criteria it will use to decide whether an additional group may be added to an existing multiple-common-bond credit union.

(e) Additional membership eligibility provisions.

(1) Immediate family or household members. A person may not qualify for membership because of a relationship to another eligible person unless the person is part of that other person’s immediate family or household. The Board defines those terms by regulation.

(2) Retention. Except as provided in section 1764 of this title, after a person or organization becomes a member under this subchapter, it may remain a member until it chooses to withdraw.

(f) Approval of expansion of multiple-common-bond credit unions.

(1) In general. The Board must encourage a group to form a separately chartered credit union instead of adding the group to an existing credit union whenever practicable and consistent with reasonable safety-and-soundness standards. If forming a separate credit union is not practicable or consistent with those standards, the Board must, whenever practicable and consistent with those standards, require the group to join a credit union reasonably close to the group.

(2) Approval criteria. The Board may not approve an application to add a group to a multiple-common-bond credit union, or an application by a single-common-bond credit union to add a group and become a multiple-common-bond credit union, unless the Board decides in writing that:

(A) During the year before the application was filed, the credit union did not engage in a material unsafe or unsound practice;

(B) The credit union is adequately capitalized;

(C) It can administer service to the proposed group and has the financial resources for the additional staff and assets needed;

(D) Any possible harm to another insured credit union^* and its members is clearly outweighed in the public interest by the likely benefit of meeting the proposed group’s convenience and needs; and

(E) The credit union has met any other requirements the Board sets by regulation.

(g) Regulations required for community credit unions.

(1) Definition. The Board must define “well-defined local community, neighborhood, or rural district” by regulation for deciding the membership field of a community credit union and setting the criteria for those decisions.

(2) Scope. The Board’s definition applies to an application to form a new credit union or change or expand an existing credit union’s membership field if the application is filed after August 7, 1998.