How to Submit Requests to Serve A Local Community Using the Narrative Approach

In June, the NCUA Board approved a final rule providing federal credit unions with more flexibility when submitting an application for a community-charter conversion or expansion. Under the rule, which went into effect on Sept. 1, federal credit unions now have the option to submit applications using a narrative — with sufficient supporting documentation — to establish the existence of a well-defined local community.

The NCUA Board provided this additional option because it recognized that not all potential, well-defined local communities align with what has been established previously.

Using the Narrative Approach in Your Application

A community application based on the narrative approach must include evidence that clearly supports that the proposed area qualifies as a well-defined local community. It is not necessary to provide excessive documentation. However, an applicant must provide the NCUA with sufficient information to support how the area’s residents interact or share common interests.

Each community is unique and each will have different fact patterns to support how it is a well-defined local community according to the NCUA’s Chartering and Field of Membership Manual. In virtually all cases, the most persuasive evidence supporting a well-defined local community comes from independent third-party sources and includes, but is not limited to, statistical evidence, studies, research papers, economic data, and other reports and articles from:

  • The U.S. Census Bureau;
  • Other federal government agencies;
  • State government agencies;
  • Local government offices;
  • Area colleges, universities, businesses, and community organizations; and
  • Local business journals, magazines, and newspapers.

Applications often include evidence based on anecdotal knowledge and inference. However, our experience indicates these forms of evidence are considerably less persuasive than information derived from the third-party sources listed previously.

Supporting Your Well-defined Local Community

The Chartering and Field of Membership Manual includes an appendix that offers guidelines for applications using a narrative approach. The appendix sets 13 narrative criteria that identify a well-defined local community and explains each criterion so a federal credit union can develop an effective and well-documented narrative.

Based on our experience, these 13 criteria (outlined in the following) are generally the most compelling indicators that demonstrate common interests or interactions. Applicants are not limited to addressing just these criteria and can submit any other documentation or address other criteria supporting how the area qualifies as a well-defined local community.

Additionally, a proposed area does not have to meet all of the narrative criteria to qualify as a well-defined local community. Rather, the totality of circumstances within the criteria a federal credit union elects to address must indicate a sufficient presence of common interests or interactions among the area’s residents.

Central Economic Hub

An economic hub is evident when one political jurisdiction (city or county) within a proposed local community has a relatively large percentage of the community’s population or is the primary location of employment. The presence of a central economic hub provides significant opportunities for residents to interact or share common interests. It is the most persuasive criterion because a common employment center promotes other activities such as shopping, healthcare, and recreation while also serving as a focal point for major events and local media coverage.

The Census Bureau, other federal agencies, state and local government entities, and private companies produce extensive data covering employment, commuting, and population patterns that can used to document a central economic hub.

Quasi-governmental Agencies

The existence of organizations, such as economic development commissions, regional planning boards, and labor or transportation districts can be important factors to consider. The more closely their service area matches the proposed area, the greater the evidence of interactions or common interests. Information about quasi-governmental entities is available through internet search results, guides produced by local chambers of commerce, or evidence of projects sponsored by public and private entities within the proposed area.

Governmental Designations

Designation of the proposed community as a region or distinct district by a government agency, such as a regional transportation district, a water district, or a tourism district, is a factor that can support an area being a well-defined local community with common interests and interactions. Examples of government designations include school councils, fire or police districts, and public transportation districts. Information about governmental designations is available on federal, state, or municipal websites.

Shared Public Services and Facilities

The existence of shared services and facilities, such as police, fire protection, park districts, public transportation, airports, or public utilities, can demonstrate an area is a well-defined local community when their geographic areas substantially cover the proposed community. Statistical data or copies of formal agreements that demonstrate interactions or common interests should be included in the application.

Qualitative factors also exist to support how an area is a well-defined local community, including the following examples:

  • A fire district located entirely within the proposed community demonstrates a common dependency of the same entity for fire protection;
  • The same electricity company serving the entire proposed area; or
  • A regional airport that is the only major source for air travel within the proposed service area and the 100-mile radius immediately surrounding the area.

Hospitals and Major Medical Facilities

Data on medical facilities should include admittance or discharge statistics providing the ratio of use by residents of each political jurisdiction. The greater the percentage of use by residents throughout the proposed community, the more this data shows common interests or interactions. The application can also support the importance of an area hospital with documentation that correlates to the facility’s target area with the proposed local community or discusses the relative distribution of hospitals over a larger area.

You may obtain data from the medical facility itself or a third-party research firm. Ideally, your application will include information about the number of patients that use the hospital and where the patients live. If the proposed service area consists of three counties, statistical data demonstrating how a major hospital receives a high percentage of its patients from the three counties is most persuasive.

In the absence of statistical data, some qualitative factors that could support how a medical facility promotes interactions or common interests include:

  • The absence of other geographically close options available to residents for receiving similar medical care;
  • The existence of a specialty health care provider attracting residents from throughout the proposed community due to unique expertise in treating a particular condition; or
  • Evidence of efforts on the part of the health care facility to promote wellness throughout the proposed area through health fairs, fundraising events, or educational initiatives.

Colleges and Universities

Applications should address how a broad base of institutions of higher learning, including the area’s colleges, universities, and technical and vocational schools, support how residents interact or share common interests. You may obtain data from the college and universities themselves or through a third party.

In the absence of statistical data, some qualitative factors that could support how an educational institution promotes interactions or common interests include:

  • A college or university sponsoring college fairs or having partnerships with local high schools throughout the entire area;
  • A college, university, technical or vocational school inviting employers from throughout the area to participate in job fairs;
  • A vocational school traveling throughout the area to offer prospective students exposure to career opportunities;
  • A local institute of higher learning sponsoring periodic alumni events that draw participants from throughout the area; or
  • A university conducting studies to promote local economic growth and development.

Mutual Aid Agreements

The existence of written agreements among law enforcement and fire protection agencies to provide services across multiple jurisdictions can be an important factor to determine a well-defined local community. These types of arrangements may not be prevalent everywhere, since different parts of the country establish varied strategies for addressing public service needs.

The most persuasive evidence for this criterion are copies of the mutual aid agreements. You can find this data through internet searches of the respective municipality websites, contacting the service provider directly, or by relying upon community awareness.

Organizations and Clubs

The more closely the service area of an organization or club matches the boundaries of the proposed well-defined local community, and the greater the percentage of membership and services throughout the proposed community, the more relevant the data. For example, you may obtain information about the areas an organization’s members reside or other data showing how a group allocates its resources to serve the area.

In addition, some qualitative factors that could support how organizations and clubs promote interactions or common interests include the following examples:

  • A faith-based organization conducts outreach programs throughout the area or has an assigned geographic coverage area matching the proposed local community;
  • An advocacy group sponsors events in a central location and attracts volunteers from the entire area;
  • A local business organization considers the area to be a unique market and participates in efforts to improve the business climate throughout the area; or
  • Local business, government, and social services leaders from throughout the area form an organization to pool resources for addressing common needs, such as healthcare, community education, or other philanthropic activities.

Community Newspaper

A newspaper that is widely read in an area can be an indication of common interests and interactions. For example, you may obtain information about how an area newspaper draws a significant percentage of its subscribers from the proposed service area. Circulation data may include print copies as well as online access. You may obtain data from the newspaper or a third-party research firm.

Qualitative factors demonstrating how an area newspaper supports interactions or common interests include:

  • Companies from throughout the proposed service area place advertisements in the newspaper; or
  • The newspaper has a local news section devoted to stories of interest to locations throughout the proposed service area.

Entertainment and Sporting Events

For sporting events, as well as some entertainment events, data on season ticket holders and memberships may be available. As with overall attendance figures, the higher the percentage of residents from throughout the proposed community, the stronger the evidence of interactions and common interests.

For example, you may obtain the number of people, broken down by place of residence, attending an entertainment or sporting event. You may obtain data from the venue, team, or a third-party research firm. Similar statistics from theaters, concerts, festivals, minor league teams, or other events that draw crowds of people into the area can also be persuasive.

Qualitative factors that could support how residents interact or share common interests include:

  • A state fair that includes exhibits from places throughout the proposed service area and draws participants from the entire local community;
  • Local public schools establishing regions or divisions covering the entire proposed service area that provide structure for sporting events or other types of competitions; or
  • A coalition of local business and government leaders working collectively to ensure a major event or gathering takes place within the proposed service area, such as a parade, marathon or similar event, the celebration of a predominant local culture, or an exhibition featuring technological achievements in the area.

Local Television and Radio Stations

A television or radio station broadcasting in an area can be an indication of common interests. Data on viewership or listenership in the proposed community can support the existence of a well-defined local community. You may obtain the number of viewers or listeners directly from the television or radio station, or a third-party research firm.

Qualitative data supporting interactions or common interests could include:

  • Local stations sponsoring events, such as those involving charitable objectives, that have a positive impact on the entire proposed service area;
  • Local stations identifing the proposed service area as their coverage zone; or
  • Local stations having news programs that cover events throughout the area.


The narrative must identify the location of major shopping centers and malls, and include the percentage of shoppers coming from each part of the proposed community. The larger the percentage of shoppers from throughout the community, the stronger the case for interactions and common interests. The shopping venue’s target area should closely match the geographic boundaries of the proposed community.

You may obtain the number of individuals shopping in the area from chambers of commerce, economic development agencies, shopping facilities, or third-party research firms. Qualitative factors that could support how area residents interact or share common interests include:

  • Several mall tenants belonging to a local chamber of commerce covering the proposed service area; or
  • Residents in outlying parts of the proposed community lacking other viable options for shopping.


Some communities face varying degrees of geographic isolation. As such, mountain ranges, forests, national parks, deserts, bodies of waters, and other geographic features can limit travel to places outside the proposed well-defined local community. This factor, and the relative degree of isolation, may help bolster a finding of interactions or common interests.

Please note geographic isolation depends entirely on the area. If unique factors exist, applications should include topographic maps showing the proposed community’s area with the surrounding area.

Additional Information and Questions

Additional information about how to use the narrative approach can be found in Letter to Federal Credit Unions, 18-FCU-02, “Requests to Serve a Well-Defined Local Community Using the Narrative Approach.”

Also, please contact the Office of Credit Union Resources and Expansion’s Division of Consumer Access at 703.518.1150 or at if you have any questions on the narrative or an application to serve a local community.

Last modified on