What is a Common Bond?
One of the requirements of a credit unions is that members have something in common with one another.
This is known as a “Common Bond” and is defined by the credit union when deciding who is eligible to join.
Credit unions are run democratically and in the interests of those people who use their services and fall within the remit of their common bond.
This helps to reflect the fact that credit unions are organisations run for the benefit of its members with a social connection.
Membership of a credit union can be governed in several ways.
It can offer membership to individuals who follow a particular occupation or who are employed by a particular company or organisation.
Membership can also be restricted to people living or working in a certain area and this can vary from a small village to a large local authority.
Some credit unions also allow membership to individuals who live in the same household as a member and fall within one of the categories of the common bond.
It is the responsibility of the credit union to produce a membership rule that meets their requirements which is why the common bond is an essential part of the legislation governing the financial cooperative.