State credit unions will be allowed to have, as a minimum, at least as much flexibility as federal credit unions in the regulation of fields of membership. The following guidelines and standards shall be considered by the commissioner in evaluating field of membership requests.

1. (1) Occupational common bond.

   1. (A) This common bond is based on an employment relationship with a specified employer. Persons sharing this common bond may be geographically dispersed. Employees of a parent corporation and its subsidiaries and persons under contract to work regularly for an enterprise may be considered under a single occupational bond. Each category to be served (e.g., subsidiaries, contractors) should be separately listed, if practical. Persons employed by different entities, even if closely related geographically, persons working at a single shopping center, industrial park, or office building, for example, are not treated as having an occupational common bond.
   2. (B) All occupational common bonds should include a geographic definition: e.g., "employees, officials, and persons who work under contract regularly for ABC Corporation or any of its subsidiaries, who work in Houston, Texas." Other acceptable geographic definitions are "employees...who are paid from...." or "employees...who are supervised from...."
   3. (C) The employer may also be included in this common bond--e.g., "ABC Corporation and its subsidiaries."

   4. (D) Some examples of occupational group definitions are:

      1. (i) "employees of the Scott Manufacturing Company who work in El Paso, Texas...";
      2. (ii) "employees and elected and appointed officials of municipal government in Tyler, Texas...";
      3. (iii) "employees of Sharp Drillbit Company and its subsidiary, Drillbit Salvage Company, who work in Midland or Houston, Texas...";
      4. (iv) "personnel of fleet units of the United States Navy home port at Ingleside, Texas...";
      5. (v) "civilian and military personnel of the United States Government who work or are stationed at, or are attached or assigned to Fort Hood, Texas, or those who are retired from, or their dependents or dependent survivors who are eligible by law or regulations to receive and are receiving benefits or services from that military installation...";
      6. (vi) "employees of these contractors who work regularly at United States Naval Shipyard in Ingleside, Texas...";
      7. (vii) "employees, doctor, medical staff, technicians, medical and nursing students who work at Galveston Medical Center at the locations stated:...";
      8. (viii) "employees and teachers who work for the Fort Worth Independent School District in Fort Worth, Texas...."

   5. (E) Some examples of insufficiently defined occupational groups are:

      1. (i) "employees of engineering firms in Houston, Texas"; (No common employer; names of firms must be stated; however, may be the basis for a multiple group.)
      2. (ii) "persons employed or working in Dallas, Texas"; (No common employer; names of firms must be stated.)
      3. (iii) "persons working in the entertainment industry in Texas." (No common employer; names of firms should be stated.)

2. (2) Associational common bonds.

   1. (A) This common bond is generally based on groups consisting primarily of natural persons who participate in activities developing common loyalties, mutual benefits, and mutual interest. Qualifying associational groups must hold meetings open to all natural person members at least once a year, must sponsor other activities providing for contact among natural persons members, and must have an authoritative definition of who is eligible for membership--usually, this will be in the associations's constitution and bylaws. The clarity of the associational group's definition and compactness of its membership will be important criteria in reviewing the application. The department policy is to organize associational charters at the lowest organizational level which is economically feasible.
   2. (B) Students constitute an associational common bond and may qualify for a credit union charter.
   3. (C) Associations formed primarily to obtain a credit union charter do not have a sufficient associational common bond; nor do associations based on a client or customer relationship; an insurance company's customers or a buyer's club, for example.
   4. (D) The department normally charters associational credit unions consisting of natural person members. The department will allow nonnatural persons (e.g., corporate sponsor or organizations of members) to be eligible for membership.
   5. (E) Moreover, the common bond usually would extend to the association's members and their employees. However, situations may exist where the employees of a member of an association do not have a sufficiently close tie to the association to be included.
   6. (F) Homeowner associations, tenant groups, electric co-ops, consumer groups, and other groups of persons having an interest in a particular cause and certain consumer cooperatives may be eligible to receive a charter; however, they must make a strong showing of common activities and economic viability. Newly organized associations must make similar showing; experience has shown that a new group's efforts are best focused on solidifying member interest before attempting to offer credit union service.
   7. (G) All associational common bonds will include a definition of the group and a geographic or operational area limitation, unless the constitution or bylaws of the associational group limit the geographical area--e.g., "Members of the Small Businessmen Association living or working in Dallas, Texas, who qualify for membership in accordance with its constitution and bylaws in effect on January 21, 1989."
   8. (H) The association itself may also be included in the field of membership; e.g., "ABC Association."

   9. (I) Some examples of associational group definitions are:

      1. (i) "regular members of Locals 10 and 13, IBEW Union, Houston, Texas, who qualify for membership in accordance with their constitution and bylaws in effect on May 20, 1989";
      2. (ii) "members of the Texas Farm Bureau who live or work in Williamson or adjacent counties, who qualify for membership in accordance with its constitution and bylaws in effect on March 7, 1990";
      3. (iii) "members of the Catholic Church who live or work in Del Rio, Texas";
      4. (iv) "members of the First Baptist Church in Georgetown, Texas";
      5. (v) "regular members of the Corporate Executives Association, located in Dallas, Texas, who live or work in Dallas, Texas, who qualify for membership in accordance with its constitution and bylaws in effect on December 1, 1985";
      6. (vi) "members of the Lower Colorado River Authority located in Austin, Texas."

   10. (J) Some examples of insufficiently defined association group definitions are:

       1. (i) "members of military service clubs in the State of Texas"; (No single associational tie; specific clubs and locations must be named; may be considered as multiple group.)
       2. (ii) "veterans of United States military service."

   11. (K) Some examples of unacceptable associational common bonds are:

       1. (i) "ABC Buyers Club"; (An interest in purchasing only does not meet associational standards.)
       2. (ii) "customers of ABC Insurance Company." (Policyholders or customer/client relationships do not meet associational standards.)

3. (3) Community common bonds.

   1. (A) This common bond is based upon employment or residence within a clearly defined and specified geographic area(s). Business entities within the specified geographic area(s) may also qualify for membership. Given the diversity of community characteristics throughout the state and the department's goal of making credit union service available to all eligible groups who wish to have it, the department has established the following community common bond guidelines.

      1. (i) The geographic area(s) must be clearly specified.
      2. (ii) The charter application must establish that the area(s) is recognized as a distinct neighborhood, community, or geographic area(s).
   2. (B) A typical definition of a community-based common bond is: "Persons who live or work in are located in ABC, the area of XYZ City bounded by Fern Street on the north, Long Street on the east, Fourth Street on the south, and Elm Avenue on the west."
   3. (C) Additional criteria may be considered for an application to convert to or expand an existing community common bond and may include, but not be limited to, providing for a protective exclusion for honoring existing credit unions in the proposed area(s).

   4. (D) Some examples of community common bond definitions are:

      1. (i) "persons who live or work are located in Brown County, Texas";
      2. (ii) "persons who live or work in and business entities located in Spring Branch Independent School District, Houston, Texas";
      3. (iii) "persons who live or work are located within a ten-mile radius of El Campo, Texas."

   5. (E) Some examples of insufficiently defined community common bond definitions are:

      1. (i) "persons who live or work in East Texas";
      2. (ii) "persons who live or work in the ship channel section of Houston, Texas."

4. (4) Multiple-group charters.

   1. (A) The department may charter a credit union to serve a combination of definable occupational, associational, and/or community groups.

   2. (B) In addition to general chartering requirements, special requirements pertaining to multiple-group applications may be required before the department will grant such a charter.

      1. (i) Each group to be included in the proposed field of membership of the credit union must have its own common bond.
      2. (ii) Each group must individually request inclusion in the proposed credit union's charter.

5. (5) Overlap protection.

   1. (A) The commissioner will consider the extent and effect of an overlap proposed by an application to expand a credit union's field of membership or when a charter application proposes an overlap.
   2. (B) The commissioner will weigh the information in support of the application and any information provided by a protesting or affected credit union. If the applicant demonstrates feasibility and no protestant reasonably establishes a basis for denying the request, it shall be approved.
   3. (C) If a finding is made that overlap protection is warranted, the commissioner shall reject the application or require the applicant to limit or eliminate the overlap by adding exclusionary language to the text of the amendment, e.g., "excluding persons eligible for primary membership in any occupation or association based credit union that has an office within a specified proximity of the applicant credit union at the time membership is sought."

Source Note:The provisions of this §91.301 adopted to be effective July 8, 1994, 19 TexReg 4926.