Maximizing Growth Opportunities Through Field of Membership Optimization

On December 18, 2024, CUCollaborate hosted the final webinar of its 2024 series, focusing on Field of Membership (FOM) optimization. Credit union leaders joined to explore actionable insights on assessing and expanding their FOM to drive growth and meet strategic goals. This webinar featured CUCollaborate's COO, Chris Tissue, and Advisory Director Emily Hughes, both seasoned experts in regulatory optimization and market expansion strategies.

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This summary highlights key takeaways and case studies discussed during the session, offering valuable perspectives for credit unions considering FOM changes in 2025.

Why Field of Membership Matters

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Field of Membership is the foundation of a credit union’s growth potential. The webinar explored the importance of FOM in enabling credit unions to broaden their total addressable market while aligning with their mission and strategic objectives.

Key insights included:

• The average market share for community credit unions is 1.48%. Credit unions exceeding this benchmark may face diminishing growth opportunities and should evaluate their FOM for potential expansion.
• Understanding FOM rules and evaluating your credit union’s charter type (single common bond, community charter, multiple common bond, or state charter) can unlock growth opportunities tailored to your institution’s strengths.

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Common FOM Challenges and Solutions

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The speakers shared strategies for addressing common challenges in FOM expansion, including:

• Navigating regulatory complexities and ensuring compliance with NCUA or state guidelines.
• Leveraging mapping tools like CUCollaborate’s ExpandCU software to assess and visualize growth opportunities within a compliant FOM framework.
• Integrating strategic goals, such as branching or membership growth, into FOM planning to achieve a seamless alignment.

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Case Studies: Success Through FOM Optimization

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1. Community Expansion in New York State
A credit union in New York used CUCollaborate’s software to map the service area for a new branch. This analysis facilitated a compliant rural district FOM expansion, enabling the credit union to grow its member base while aligning with regional trends.

2. Hybrid Field of Membership in Texas
A Texas credit union leveraged a hybrid FOM approach, adding an association to its community charter to expand eligibility. This strategy enhanced the credit union’s auto-lending program while making its services accessible to more community members.

3. Diversifying Membership in Alabama
An Alabama-based multiple common bond credit union expanded into underserved areas using algorithmic mapping. This diversification strategy allowed the credit union to reduce reliance on a single membership segment while strengthening its community connections.

Steps to Evaluate and Optimize Your FOM

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The webinar concluded with actionable steps for credit unions to assess and refine their FOM:

1. Evaluate Market Penetration: Calculate your credit union’s market share to determine if your FOM supports your growth goals.
2. Understand Regulatory Guidelines: Familiarize yourself with federal and state FOM rules to identify viable expansion options.
3. Build a Business Case: Ensure your expansion strategy includes a robust plan with projections, marketing budgets, and operational readiness to satisfy regulatory requirements.
4. Engage Stakeholders: Involve your leadership team, board members, and community partners in discussions to ensure alignment.

Looking Ahead

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As the credit union industry evolves, optimizing your FOM remains a critical strategy for sustainable growth. Whether you’re planning a branch expansion, enhancing digital services, or targeting underserved areas, CUCollaborate’s expertise and tools can help you navigate the complexities of FOM changes.

For more information or to explore FOM optimization for your credit union, schedule a consultation with CUCollaborate’s team.

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