August 28, 1997
Phyllis A. Bowe, Manager
Kanawha County School Employees FCU
1320 Kanawha Boulevard, East
Charleston, West Virginia 25329
Dear Mrs. Bowe:
We apologize for the delay in responding to
your inquiry but, as I am sure you know, much has happened regarding
fields of membership. You asked for our assistance regarding
language that would permit "all persons living within the
same household to become members" of your federal credit
union (FCU).
As background, your board of directors is seeking
to eliminate a perceived discriminatory effect under your existing
charter because "all persons living in the same household
are not eligible for membership" in your FCU. The board
proposed adding "person(s) who share financial interest and
financial responsibility with a bona fide member" to your
FCU's field of membership.
Unfortunately, the proposed wording does not
address the perceived discriminatory problem and the individuals
included in the proposed language do not constitute a group recognized
as having the requisite relationship to a common bond group.
In your proposal, only a shared financial obligation or relationship
is required. This would permit membership based on a purely business
relationship; sharing of a household would not be a prerequisite.
Further, a group having a shared financial interest or responsibility
does not exhibit the requisite close relationship recognized in
NCUA's chartering policy. Thus, the charter amendment you propose
would not be acceptable.
While it may not be possible to fully accomplish
what you desire -- serving all members of a household -- without
converting to a community charter, you do have some flexibility
with a bylaw amendment. You can broaden the definition of "members
of their immediate families" found in Article XVIII, Section
2 of your bylaws. An FCU's right to create its own definition,
however, is not unlimited: the definition must be sufficiently
limited to give the term "immediate family member" a
rational, discernible meaning. In the past, we have stated that
there must be an ongoing "familial" relationship between
a primary member and those who qualify for membership as an immediate
family member. Merely sharing a household or a purely business
relationship would not be sufficient. We also have had occasion
to respond to questions about "immediate family member"
in the context of unmarried couples, in both heterosexual and
homosexual relationships. Again, we would look to factors indicating
a familial relationship. The definition might include references
exemplifying the intended permanence of the relationship: regular
cohabitation; joint ownership of property with right of survivorship;
joint credit obligations; and custodial rights over minors or
other dependents. In brief, the definition should include factors
indicating a more than casual relationship to the primary member
or the sharing of a household.
Sincerely,
James J. Engel
Deputy General Counsel
GC/JJE:bhs
SSIC 3700
96-0904