Field of Membership (Ch. 1)

Question 1

Can a nonmember be a co-borrower? Guarantor? Cosigner?

Answer 1

• Nonmembers cannot be co-borrowers

- Nonmembers can be cosigners or guarantors on member loans

Question 2

Where is the best place to look for the credit union’s field of membership?

Answer 2

Section 5 of its charter

Question 3

How can a business or organization qualify for membership?

Answer 3

• Located in the FOM’s geographic boundaries for a community charter
• Specifically listed in the FCU’s charter
• The charter includes the phrase “organizations of such persons” and the organization is made entirely of persons within the FOM

Question 4

When may a federal credit union accept nonmember deposits?

Answer 4

FCUs may receive payments on shares from nonmember
public unit accounts of federal, state, and local
governments.

Question 5

What does the phrase “organization of such persons” mean? Do all the individuals need to be within the field of membership or only a majority?

Answer 5

A group which is 100% comprised of individuals who fall within the field of membership

Question 6

When can federal credit unions cash checks for nonmembers?

Answer 6

FCUs can cash on‐us checks or do fund transfers to

nonmembers who fall in the FOM and charge a fee

Question 7

Which “other persons” may be eligible for membership and join the credit union?

Answer 7

• Employees of the federal credit union
• Retired federal credit union employees
• Volunteers (e.g., work at a sponsor group)
• Spouses of persons who died while within the field of membership
• Businesses and other legal entities in the charter (e.g., sponsor corporation)
• Honorably discharged veterans of the US Armed Forces
• Members of the immediate family or household
• Organizations of such persons