Dear Mr. Tschudy:

You have asked whether the National Association for Retired Credit Union People (NARCUP) meets the requirements for an associational common bond under NCUA's Chartering and Field of Membership Manual ("Chartering Manual")(IRPS 94-1 as amended). NARCUP qualifies as an association under NCUA's field of membership policy.

ANALYSIS

Chapter 1, Section II.B.1 of the Chartering Manual states in part that:

Qualifying associational groups must hold meetings open to all natural person members at least once a year, must sponsor other activities which clearly demonstrate that the members of the group meet and interact regularly to accomplish the objectives of the association, and must have an authoritative definition of who is eligible for membership - usually, this will be the association's charter and bylaws.

In determining whether a group satisfies the common bond requirement for a federal credit union charter, NCUA will consider the totality of the circumstances -- such as whether members pay dues, have voting rights, and hold office, whether the group maintains a membership list, the clarity of the associational group's definition and compactness of its membership, and the frequency of meetings and the interaction of members. A support group, whose members are continually changing, may not meet the criteria.

NARCUP has a constitution and bylaws. Article II, Section 2.01 of NARCUP's Bylaws (the "Bylaws") sets forth the purpose of the group. In part, NARCUP's purpose is to "explore and create new benefits related to the changes in economic, social and legal condition brought on by retirement and resulting changes in income, social levels, and standard of living requirements" and to " [f]oster and promote educational programs designed to inform the growing new generations as to the basic principles on which the credit union ideals and movement were established and continue to function." Although there is a commercial aspect to NARCUP, the association is not based on a client-customer relationship. Article III, Section 3.01 of the Bylaws states that to become a member a "person must be a present or former credit union member age fifty (50) and older or retired and their spouses."

Article V, Section 5.01 of the Bylaws requires members to pay dues and Article III, Section 3.03 provides members with voting rights. To be eligible for office, Article VI, Section 6.01 of NARCUP's Bylaws requires the person to be a member of a credit union that is affiliated with a state league that is a member of the Credit Union National Association. Although somewhat restrictive, a majority of NARCUP members could qualify to hold office under this provision. NARCUP has a membership list and Article IV of the Bylaws provides for holding annual meetings and sets forth the procedures for special meetings. Members receive a quarterly magazine and may contribute their ideas to the association with letters to the magazine or calling an toll-free number. Based on the totality of the circumstances, NARCUP meets the requirements for an associational common bond.

Although you have asked us whether NARCUP can join a federally chartered credit union as an association, there are restrictions on which credit union NARCUP may join. NARCUP's headquarters is located in Madison, Wisconsin. It is our understanding that NARCUP only exists at the national level and has only begun to form local chapters. If NARCUP as an organization wishes to join a credit union then operational area requirements must also be met and any request must receive an overlap analysis by the regional office. An associational group can only meet operational area requirements if its headquarters or a majority of its members are within a federal credit union's operational area. NARCUP may be eligible for membership in a number of credit unions with service facilities in the Madison area. Although NARCUP meets associational common bond requirements, it is restricted to joining a credit union near Madison, Wisconsin, due to operational area requirements.

Sincerely,

Richard S. Schulman
Associate General Counsel

GC/MJMcK:bhs
SSIC 6010
96-0737