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FORT WORTH, Texas – American Airlines Federal Credit Union, the eighth largest credit union in the U.S. with $4 billion in assets, has applied to the NCUA for a TIP (trade, industry or profession) field of membership expansion. At press time, AAFCU had not received approval on its application, but the CU expects it will be considered by the NCUA Board at its September meeting. “TIP is a great incremental growth opportunity that would utilize our brand, our branches, our ATMs, and it would work alongside our existing membership,” said American Airlines FCU President and CEO John Tippets. Effective May 15, 2003, the NCUA amended its policies to allow federally chartered “single occupational common bond” credit unions to expand to a TIP credit union. The change is intended to reduce sponsor risk and risk to the National Credit Union Share Insurance Fund. A proposal to NCUA for TIP expansion must answer three questions: who will the credit union serve (definition of TIP), how will the credit union serve them, and how will the credit union determine individuals are in the credit union’s defined field of membership. TIP common bond definitions require that businesses produce similar products, provide similar services, share the same profession or trade, and/or participate in the same industry. Although diversification is inherent in TIP expansion, change for the credit union theoretically would be less drastic than with community, multi-SEG or state charter change alternatives. Regarding the status of American Airlines FCU’s application, Tippets said, “We’ve had subsequent dialogue with NCUA since submitting our initial application, and we are reapplying. We have issues still to be worked out regarding the credit union’s definition of TIP, and we are addressing those.” A TIP field of membership expansion could benefit American Airlines FCU in its efforts to support its members through turbulent economic times faced by American Airlines and parent company AMR Corporation since September 11, 2001. The TIP approach could provide for continued credit union growth, counteract declining enrollment, and assure strength and soundness by diversifying employer risk, while enabling the credit union to maintain its strong brand ties to American Airlines. [email protected]

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