84 [83 Op. Att’y

FINANCIAL INSTITUTIONS

CREDIT UNIONS ) MEMBERSHIP RESTRICTIONS

May 5, 1998

Mr. H. Robert Hergenroeder

Commissioner of Financial Regulation

You have requested our opinion concerning restrictions on

membership in State-chartered credit unions, in light of a recent

Supreme Court decision, National Credit Union Admin. v. First

Nat’l Bank & Trust Co., 118 S. Ct. 927 (1998), that restricts

membership in federally chartered credit unions. Specifically, you

ask whether membership in State-chartered credit unions is limited

by Maryland law to those individuals having a single common bond

with all other members of the credit union. In addition, you ask

whether the Commissioner of Financial Regulation has the authority

to rely upon the so-called “wild card” statute to allow multiple

employer groups as members in a Maryland credit union, if this

breadth of membership were permissible under federal law. 

Our opinion is as follows:

1. Under §6-210 of the Financial Institutions (“FI”) Article,

Maryland Code, all members of a State-chartered credit union must

share with all other members a single common bond. 

2. If federal law allowed multiple common bonds among

members of federally chartered credit unions, the Commissioner

could apply the “wild card” statute, FI §6-208, to permit multiple

common bonds among members of State-chartered credit unions. At

present, however, federal law does not allow multiple common

bonds. Therefore, the Commissioner may not use the “wild card”

statute to allow multiple common bonds as a basis for membership

in State-chartered credit unions. 
Gen. 84] 85

I

The Supreme Court Decision

Section 109 of the Federal Credit Union Act, 48 Stat. 1219, 12

U.S.C. §1759 (the “federal Act”), provides that “[f]ederal credit

union membership shall be limited to groups having a common bond

of occupation or association, or to groups within a well-defined

neighborhood, community or rural district.” Until 1982, the

National Credit Union Administration (“NCUA”) and its

predecessors had consistently interpreted §109 to require that the

same common bond of occupation unite every member of an

occupationally defined federal credit union. 

In 1982, however, the NCUA reversed its longstanding

interpretation of the federal Act and began permitting membership

by multiple, unrelated employer groups. Under this revised

interpretation, the common bond requirement of §109 applied only

to each employer group within a multi-group credit union, rather

than to every member of the credit union. For example, under

NCUA’s revised interpretation of §109, a credit union originally

formed to serve the employees of one company was allowed to

expand by opening its membership to employees of many other

companies. Each member would have a common occupational bond

with one distinct group of members but not with other groups of

members. 

In National Credit Union Admin. v. First Nat’l Bank & Trust

Co., a group of banks and their national trade association challenged

the NCUA’s approval of membership of certain unrelated employee

groups in the AT&T Family Credit Union. The banks claimed that

NCUA’s revised interpretation misconstrued the federal Act.

The Supreme Court agreed with the banks. It held that the

common bond restriction of §109 does not permit a federal credit

union to be composed of multiple unrelated groups having distinct

common bonds. When Congress enacted the federal Act in 1932,

the Court found, it unambiguously expressed its intent that the same

common bond of occupation must unite all members of an

occupationally defined federal credit union. Because Congress itself

had addressed the matter, the Court rejected the argument that the

NCUA’s interpretation of the federal Act should be accepted as a

reasonable one: 
86 [83 Op. Att’y

[W]e first ask whether Congress has “directly

spoken to the precise question at issue. If the

intent of Congress is clear, that is the end of

the matter; for the court, as well as the agency,

must give effect to the unambiguously

expressed intent of Congress.” ... If we

determine that Congress has not directly

spoken to the precise question at issue, we

then inquire whether the agency’s

interpretation is reasonable.... Because we

conclude that Congress has made it clear that

the same common bond of occupation must

unite each member of an occupationally

defined federal credit union, we hold that the

NC UA ’s contra ry interpretation is

impermissible ....

118 S. Ct. at 938-39 (quoting Chevron U.S.A., Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837 (1984)).

II

Maryland Restrictions on Credit Union Membership

FI Title 6 governs State-chartered credit unions. Those who

form a credit union are required by FI §6-201 to have a common

bond:

(a) In this section “organization” means

any trade, profession, club, union, church

congregation, parish, society, or association,

or any fraternal, cooperative, or other

organization. 

(b) Seven or more adult individuals, each

of whom is a resident of this State and all of

whom have one of the following common

bonds, may act as incorporators to form a

credit union under this subtitle: 
Gen. 84] 87

(1) Similar occupations; 

(2) Membership in the same or

similar organizations, professions, or

associations; 

(3) Employment by a common

employer; 

(4) Employment within a defined

business district, industrial park, or shopping

center; or 

(5) Residence within an identifiable

neighborhood, community, rural district, or

county. 

(Emphasis added.) Furthermore, under FI §6-210, every member of

a credit union must share “with all other members” a common bond:

The members of a credit union are: 

(1) Each incorporator; and 

(2) Each other person who: 

 (i) Is elected to membership; 

 (ii) Subscribes to and pays for at least

one share; 

 (iii) Pays any entrance fee; 

 (iv) Shares with all other members of

the credit union one of the common bonds

approved by the Commissioner and set out

under the bylaws; and 

 (v) Meets all of the other requirements

of the bylaws.

(Emphasis added.)
88 [83 Op. Att’y

The common bond restrictions of Maryland law, as they apply

to both incorporation of and membership in State-chartered credit

unions, are similar to the limitations imposed upon their federal

counterparts by §109 of the federal Act, as definitively construed by

the Supreme Court. If there is a contrast to be drawn with the

federal Act, it is that FI §§6-201 and §6-210 even more clearly

express a legislative intent to limit membership to those sharing a

single common bond. 

It would be difficult to imagine statutory language that would

more clearly articulate a single common bond limitation. In

construing a statute, “the cardinal rule is to ascertain and carry out

the real legislative intention. The primary source of legislative intent

is, of course, the language of the statute itself”. State v. Pagano, 341

Md. 129, 133, 669 A.2d 1339 (1996). As the Court of Appeals

recently observed, “When the plain meaning of the language is clear

and unambiguous, and consistent with both the broad purposes of the

legislation, and the specific purpose of the provision being

interpreted, our inquiry is at an end.” Lewis v. State, 348 Md. 648,

653, 705 A.2d 1128 (1998).

Judging from the legislative history, the “clear and

unambiguous” statutory language is entirely consistent with the

evident legislative purpose: to limit the membership of Statechartered credit unions by means of the common bond requirement.

Prior to 1988, FI §6-210 did not contain the common bond

requirement for members; only incorporators were required to share

one common bond. In Chapter 635 of the Laws of Maryland 1988,

however, the General Assembly added the membership requirement

in FI §6-210(2)(iv). Chapter 635 was enacted following the savings

and loan crisis, to facilitate the conversion of certain State-chartered

mutual savings and loan associations (“S&Ls”) to Marylandchartered credit unions. While the legislative history offers little

direct guidance on the issue, the topic of a common bond was

apparently a concern, because the members of converting S&Ls

would not all share a single common bond. Chapter 635 included a

special membership provision applicable to converting S&Ls:

In addition to membership authorized in

§6-210 of this title, a credit union resulting

from a conversion under this subtitle may

permit individuals who, at the time of
Gen. 84] 89

1

 In carrying out the statutory scheme, the Commissioner may

approve for each credit union only one of the common bonds set out in FI

§6-201(b). 

conversion, are members, savings account

holders, directors, officers, employees, or

borrowers of a mutual association, to become

members of the resulting credit union.

FI §9-1109. 

If FI §6-210 did not disallow multiple common bonds among

members of a State-chartered credit union, there would have been no

need for the General Assembly to enact FI §9-1109 to accommodate

members of converting S&Ls who would not otherwise satisfy the

single common bond requirement. To read FI §6-210 as permitting

more than a single common bond of membership would render FI

§9-1109 superfluous, a result at odds with accepted principles of

statutory construction. 

Thus, in our opinion, the only acceptable reading of FI §6-210

is that State-chartered credit unions must be composed solely of

members who share with all other members one common bond.1

III

The “Wild Card” Statute

FI §6-208, sometimes referred to as the credit union “wild

card” statute, provides as follows: “Notwithstanding any other

provision of this title, on approval of the Commissioner and the

Credit Union Insurance Corporation, a credit union may engage in

any additional credit union activity or provide any related service

under the same conditions that federal law or regulation requires or

permits as to federal credit unions.” 

The credit union “wild card” statute was originally enacted as

former Article 11, Section 141A by Chapter 243 (Senate Bill 499)

of the Laws of Maryland 1978. The statutory language is similar to

the banking counterpart in FI §5-504. See generally 81 Opinions of

the Attorney General 50 (1996). 
90 [83 Op. Att’y

From its enactment, the credit union “wild card” law created

the potential for complete parity between federal and State-chartered

credit unions. In a letter dated April 3, 1978, in support of Senate

Bill 499, the chairman of what was then called the Maryland Credit

Union Insurance Corporation stated that “[the] principal reason for

the great disparity [in numbers] between state chartered credit unions

and federally chartered credit unions is the greater flexibility

permitted under federal law in reference to the federally chartered

credit unions.” The clear import of this comment is that Senate Bill

499, which included the credit union “wild card” statute, would

serve to create for State-chartered credit unions the same

“flexibility” otherwise available to their federal counterparts.

Like the banking “wild card” statute, FI §6-208 can only be

used by the Commissioner to authorize “any additional credit union

activity or ... related service.” In our opinion, expansion of

membership common bond criteria, as may be permitted by federal

law or regulation, constitutes an additional activity or related service.

As we previously stated in 81 Opinions of the Attorney General 50,

the text of the statute should not be construed to defeat its underlying

purpose. See, e.g., Romm v. Flax, 340 Md. 690, 688 A.2d 1 (1995).

In this case, that purpose is the creation of competitive parity

between State-chartered credit unions and their federally chartered

counterparts. Credit unions may only offer their services to those

individuals who qualify under applicable law for membership. The

determination of a proper field of membership is the basic “activity”

upon which their ability to offer services is established. Therefore,

the ability to admit members from groups not otherwise permitted by

State law would constitute an additional activity for purposes of the

“wild card” statute. It follows that, notwithstanding the limitations

of FI §6-210, the Commissioner may apply federal laws or

regulations when considering the approval of multiple common

bonds of membership.

The decision of the Supreme Court discussed in Part I above

has clarified that, at present, §109 of the federal Act does not permit

federal credit union membership of multiple unrelated groups, each

having distinct common bonds. Therefore, the Commissioner may

not at present invoke FI §6-208 to approve State-chartered credit

union membership composed of multiple common bonds. Should
Gen. 84] 91

2

 FI §6-208 requires the additional approval of the Credit Union

Insurance Corporation. This additional approval presumably is only

required with respect to credit unions that hold deposits insured by the

Corporation. 

Congress enact pending legislation, H.R. 1151, to broaden §109, the

Commissioner may then have room to act under FI §6-208.2

IV

Conclusion

In summary, it is our opinion that all members of a Statechartered credit union must share with all other members a single

common bond. FI §6-210 does not permit multiple common bonds

of membership. While the “wild card” statute grants to the

Commissioner the authority to apply to State-chartered credit unions

federal laws or regulations that otherwise permit multiple common

bonds of membership, federal law does not presently do so.

J. Joseph Curran, Jr.

Attorney General

Thomas L. Gounaris

Assistant Attorney General

Jack Schwartz

Chief Counsel

 Opinions and Advice