Executive Order on Fair Banking
On August 7, 2025, President Trump issued the Guaranteeing Free and Fair Banking for All Americans Executive Order (EO). Under the EO, financial regulators, such as the National Credit Union Administration, are ordered to investigate instances where financial institutions may have terminated or rejected a relationship due to political or ideological beliefs and whether these terminations may have violated laws such as the Equal Credit Opportunity Act.
In light of the EO and the focus on member/potential member ideology or politics, I thought I would go over a common question we get in the compliance inbox. Whether or not a credit union can accept a church or nonprofit as a member? The answer is that credit unions, in general, can absolutely accept churches and nonprofits as members. Now for the real question. Can your credit union accept a church or nonprofit as a member? The answer is it depends.
Unlike banks, credit unions are limited in who they can accept as a member. In order to approve a membership application, the applicant must be within the credit union's field of membership (FOM). For non-natural persons, e.g., a church, there are three main ways they can qualify for membership in a federal credit union:
1. The organization is listed in the Federal Credit Union's (FCU) charter as a member;
2. The organization is a business or other legal entity located within the geographic limits of the field of membership of the community chartered federal credit union; or
3. The federal credit union'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 first two methods are relatively straightforward. For the third method, it is key to note that the persons who compose the organization do not need to be actual members, they just need to qualify for credit union membership.
For example, suppose XYZ Federal Credit Union's field of membership is "all persons who work for XYZ Corp. and organizations of such persons." Amy, Bob and Calen have gotten together and formed ABC Inc. They want their corporation to become a member of XYZ FCU so that they can open a business account at the credit union. If Amy, Bob and Calen all work for XYZ Corp., then ABC Inc. qualifies for membership and XYZ FCU may open the business account. However, if any one of them do not work for XYZ Corp. at the time the account is opened, then ABC Inc. would not qualify for membership and the account cannot be opened. If your credit union is relying on this provision to qualify the organization for membership, all persons that make up the organization must be within your credit union's FOM but none of them have to be members. The credit union may need to obtain additional information about each person who makes up the organization in order to determine whether they all are within the FOM.
For state-chartered credit unions, you will need to check with your relevant state law to determine who you can accept as a member.
Credit unions should also note that the EO further orders financial regulators to remove the use of reputation risk or equivalent concepts from their guidance documents or other materials, as permitted by law. This is in line with a letter America's Credit Unions sent to NCUA Chairman Kyle Hauptman advocating for the removal of reputational risk from supervisory exam programs.
For more information and a more in-depth analysis of how the EO affects credit unions, members can review this FAQ on the EO. I highly recommend a review of the FAQ, as it provides helpful suggestions on actions credit unions should consider going forward.
For questions on the EO or any other compliance topic, members of America's Credit Unions can contact the compliance team at compliance@americascreditunions.org.
