The credit union recently converted to a multiple common bond charter and expanded its field of membership by 4.85 million.

WASHINGTON, D.C. September 6, 2023: On May 31, 2023, the NCUA approved Red River Employees Federal Credit Union’s (RRCU) conversion from a community to a multiple common bond charter, allowing for the addition of an unprecedented nine underserved areas to its field of membership (FOM).

The credit union’s resulting potential membership of 4.85 million represents an increase of over 440% from its previous FOM.

Backstory and Context

RRCU, based in Texarkana, Texas, in Bowie County, has a long history of establishing strong ties within its service area, all with the aim of making a positive impact on families, communities, and the region as a whole.

Staying true to this goal, the credit union, explained president and CEO Bradley Bailey, constantly engages in “efforts to understand the needs of different populations facing limited options for financial services.” RRCU had “explored numerous avenues for membership development and growth,” he continued. “After strategic discussions we conducted market research to understand how to connect directly with current and potential members.”

The result was the decision to expand the credit union’s service area.

“We see growing our field of membership as a natural extension of our mission,” said Bailey. “One of our major priorities was increasing our physical presence and improving services for our current members, however, in order to do so, we knew we would first have to expand our service area.”

The opportunities for expansion, however, were limited by RRCU’s community charter.

The Application Process

Faced with this challenge, the credit union enlisted the help of CUCollaborate, which specializes in field of membership consulting services specifically for the purpose of helping institutions expand their FOM with their regulator. Working together, the decision was made to proceed with a charter conversion coupled with the underserved area additions, which would allow RRCU to grow its field of membership without losing any current potential members.

Under a multiple common bond charter, an institution has the option of adding well-defined local communities and/or rural districts to an FOM, provided they qualify as “underserved.” To do so, an area must meet certain standards of economic distress, have proven unmet financial needs, and be underserved by other depository institutions.

In this particular case, CUCollaborate helped RRCU prepare and submit applications to the NCUA proving the underserved areas indeed met all necessary criteria, along with the institution’s ability and commitment to serving potential new members immediately.

The expansion sees the additions of nine underserved rural districts covering numerous counties across four different states—Texas, Oklahoma, Arkansas and Louisiana. The combined area, with an estimated population of 4.85 million, has the potential to increase RRCU’s membership drastically.

Impact of the Expansion

Thanks to significant planned investments, RRCU will be able to offer services across its entire new field of membership.

“We have developed a robust business and marketing plan which will allow us to serve all proposed underserved areas,” said Bailey. “We have also incorporated our experiences working with local organizations and schools into our outreach plans and are excited to partner with new organizations throughout the new field of membership.”

The expansion, he added, “allows us to grow and reach new markets, while at the same time staying true to our mission and current membership. For 80 years, we have been a steady resource for our members in all stages of life. We look forward to expanding the RRCU brand across our new five-state region!”

CUCollaborate Founder and CEO Sam Brownell also highlighted the importance of the outcome. “We are of course thrilled with the successful conversion and expansion, which underlines the vast potential of adding underserved areas,” he said. “Most importantly, though, the credit union has substantially increased its field of membership, which will allow it to offer its services to more people across the entire area, while also maintaining its great service to existing members. This progress is vital for any institution looking to grow and we are thankful RRCU trusted us to be a part of the process.”

About CUCollaborate

CUCollaborate is a challenger consultancy that champions credit union growth through disruptive innovation. The company’s aim is to help credit unions adapt, grow, and succeed long-term by offering the innovation, insight, and know-how to help them do it.

About RRCU

RRCU is headquartered in Texarkana, Texas, and serves members in Texas, Oklahoma, Arkansas, Louisiana, and Mississippi. Originally chartered in 1943, the credit union has assets of $1.4 billion, close to 117,000 members, and 30 branches, and offers its membership diverse loan and deposit accounts to meet their unique needs.

For more information on RRCU’s membership expansion, visit www.rrcu.com/membership.

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