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Field of Membership: An Evolving Concept

Changes in the interpretation of common bond and field of membership are evolving as credit unions continue to grow. This report explores this evolution.

Executive Summary

This report examines the evolution of the common bond and field of membership concepts within the credit union movement. It describes the origination of the concepts of common bond and field of membership in the early years of the credit union movement, the effect of the Federal Credit Union Act on these concepts, and how dramatic changes in the financial system altered the original narrow definition of these concepts in the 1970s and early 1980s.

What is this research about?

The researchers analyze how changing social and economic conditions altered what was “economically feasible,” thus dictating the need for new types of common bonds or combinations of groups with diverse common bonds into one field of membership. The report also discusses the major NCUA changes in field of membership provisions in the early 1980s and their effects on credit unions.

What are the credit union implications?

This report emphasizes that the economic and social climate of the first half of the century was far different than the latter part of this century. In essence, the viability of a common bond and field of membership policy as articulated in 1934 is questionable today. The capacity to adapt membership policies to changing conditions is not only necessary but critical for ongoing growth and survival of the credit union movement.