August 10, 1998
Robert J. Macey, Business Development Coordinator
Century Heritage Federal Credit Union
9 South Second Street
Duquesne, Pennsylvania 15110
You have asked two questions regarding organizational accounts
in a federal credit union (FCU). First, you ask whether a company
may be a member of an FCU. There are three ways an organization
may qualify for membership: (1) if the organization is specifically
listed in the FCU's charter as a member; (2) with respect to a
community chartered FCU, if the organization is a business or
other legal entity located within the geographic limits of the
field of membership; and (3) if an FCU's charter includes in its
field of membership "organization of such persons" and
the organization is composed exclusively of persons currently
within the FCU's field of membership. The attached letter from
me to David P. Hagar, dated March 28, 1997, discusses the meaning
and limitations of the phrase "organization of such persons."
Second, you ask whether a member may open an account on behalf
of an organization in which the member is an officer. This is
only permissible if the organization qualifies for membership
in one of the ways described above. An FCU is not authorized
to open an account on behalf of a nonmember. 12 U.S.C. §1757(6).
In your examples of a nonprofit club or social group such as
a bowling league, a likely way such organizations would be able
to qualify for membership would be as an organization of such
persons. For your information, our regulations provide that organization
accounts are generally insured separately from the accounts of
the person or persons who own or comprise the organization. 12
C.F.R. §745.6.
Sincerely,
Sheila A. Albin
Associate General Counsel
GC/MFR:bhs
SSIC 6010
98-0618
Enclosure