Joining more than one credit union

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A credit union in my city has a CD rate that I'm interested in. I already belong to another credit union. When I called to inquire about the rate and eligibility requirements, the lady said that I was eligible as long as I didn't already belong to another credit union. When I asked her how they would know if I did, she couldn't answer. My question is: Who would check that? If I lied and said that I did not belong to another credit union would anyone find out? Does the government somehow monitor this? Could the interest that I earn be jeopardized?

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miqie said: A credit union in my city has a CD rate that I'm interested in. I already belong to another credit union. When I called to inquire about the rate and eligibility requirements, the lady said that I was eligible as long as I didn't already belong to another credit union. When I asked her how they would know if I did, she couldn't answer. My question is: Who would check that? If I lied and said that I did not belong to another credit union would anyone find out? Does the government somehow monitor this? Could the interest that I earn be jeopardized?
Have you ever run a credit report before? I don't think you have to worry about the government watching that.

I'm a member of 3 different credit unions and none of them told me that I had to be exclusive to them.

You should check that CU's website to see if what the lady said is true.

Join another credit union and find out...forgiveness is ALWAYS easier than permission!

This should make a lot of you laugh, so I will preface it by saying it's the honest truth ... regardless of how insane it might sound.

The whole idea behind the "credit union movement" is to provide banking services to underserved areas or groups. Back in the ancient days -- years even before the debut of the movie "Airplane" -- branch banking was relatively uncommon. Banking was a relatively sleepy business. Getting loan was relatively difficult. There was no such thing as credit scores. There weren't even credit cards, belive it or not. Getting a car loan or a signature loan meant having an established banking relationship or having significant assets. If you were a regular joe working the then-standard 48-hour week, you were SOL.

So people banded together to form non-profit coops. Often these were employer-sponsored, open to employees of the company. They enabled employees of the company to get small loans at much better terms than would be available from a banks.

Getting a credit union charter was relatively easy. Other than some capitalization and other minor issues, the biggest thing you had to show was that the potential members were "underserved". In exchange for demonstrating that, you were given a charter to provide services to that specific underserved group or area. (Note: there are still some CUs that have the original style 5-mile, or narrow-group charters.) If your proposed area or group overlapped with another CU's, you had to amend your charter.

In theory, once a person is a member of *any* credit union, you are by definition no longer underserved. And over the years, the typical CU charter "underserved" requirement got FUBARed to the point where you'd have a hard time telling it even existed. You see CUs with national memberships or with membership requirements so loose I can't adequately describe them on a family-oriented site.

So, yes. TECHNICALLY, if you really get down to it, you shouldn't see people being members of more than 1 CU at a time.

FWIW, the more you learn about how far CUs have drifted from their core missions, the more ludricous it all seems. Anymore very very few CUs still seek out underserved people or areas. Most seek out upper-middle income families, much as with most any other financial institutions.

If the whole CU industry went away tomorrow, it wouldn't break my heart.

edit: the "government" is not charged with monitoring membership. To the extent anyone does, it's the NCUA. Although if you go out and read the ridiculous listings of requrested CU charter revisions, you'd be hard pressed there was anyone minding that requirement.

Thanks for the replys, esp. you BEEFjerKAY. Wow, what an in depth explanation. From what I'm reading here, it doesn't seem that I have much to worry about in joining more than one. I'm so clueless on this, I thought maybe I would get an official government letter stating that my assets were being seized.

I have more than one Girlfriend and more than one CU and none of them know about eachother

tripleB said: I have more than one Girlfriend and more than one CU and none of them know about eachother
They make inflatable CUs, too?

You learn something new every day around here.

miqie said: Thanks for the replys, esp. you BEEFjerKAY. Wow, what an in depth explanation. From what I'm reading here, it doesn't seem that I have much to worry about in joining more than one.
Well now, keep in mind that the credit union is likely to use ChexSystems to see what other accounts you've opened, and your other credit union will show up on that report (unless you joined the other CU a long, long time ago).

Like swandown said, check their website to see what the published eligibility requirements are.

I joined my first CU (as part of employment) back in 1988. They had the clause that said "no other CU". and I believed them.

Found others I wanted to join, but didn't want to break the rules...

Flash forward some years... and thedeals were getting better! Found FWF, and then REALLY found some deals!

As BJK said, rules are antiquated, and CU's have chagend from their original charters. I am now a member at 5 or more CU's (everyone that got in on the 9% SECU deal knows that!!!).

and as fatslob put it.... better to ask forgiveness, rather than request permission (and get denied).

You likely spoke to a less than competent CSR at that CU, its not an uncommon event.

You are qualified if you are within the CUs field of membership.
Possibly:
As an employee of their select employee group or retiree of that SEG
Reside within the community they serve
Etc ...

I recently went through this rejection, with a UFCU CSR.
I had to force the issue up the chain for the CSR to realize I was within the proper field of membership. For 6% rewards checking it was well worth it guaranteed till 2010.

ranchopedro said: You likely spoke to a less than competent CSR at that CU
Either an incompetent one or an old one who still thinks she's living in the 60's and those rules still apply!

Fundamentally, if any CU decides it wants to enforce the narrow letter of its charter, it is within its rights to do so regardless of how arcane or antiquated it might seem to today's consumers.

Many CUs cast a blind eye, either due to greed or incompetence. Before this financial crisis ends, you the taxpayer will get ample opportunity to pay for both of those.

Despite what some other posters have said here, there are in fact CUs that have exclusivity restrictions in their charters. In fact, this was true of many FCUs before 2003. See the preamble to the NCUA's amendments in 12 CFR Part 701 from 2003.

Before 2003, the NCUA monitored potential overlap between CUs' fields of service, and they could require CUs to adopt exclusionary provisions to protect small and medium CUs from their larger brethren. The 2003 amendments let any CUs remove those clauses. Since many CUs are interested in expanding, there were a slew of charter changes.

Even if you qualify for membership in a CU, you may be prevented from joining by an exclusionary clause. Proceed with caution: a CU, like any other financial institution, can regularly pull your Chexsystems record. If they see you violating your terms of membership, they can kick you out, potentially invoke penalties, etc.

I thought some CUs stated that if you lived, or worked outside their area, you could STILl join only IF you were a member of ANY credit union. I've seen several with that clause. Why do only a few have that clause?

PolarDude said: I thought some CUs stated that if you lived, or worked outside their area, you could STILl join only IF you were a member of ANY credit union. I've seen several with that clause. Why do only a few have that clause?They want to make everyone eligible to join but are legally prohibited from doing so. Consequently, they add the provision you referenced, which "limits" membership eligibility while essentially allowing any US citizen to join.

PolarDude said: I thought some CUs stated that if you lived, or worked outside their area, you could STILl join only IF you were a member of ANY credit union. I've seen several with that clause. Why do only a few have that clause?

There are CUs that use ambiguous wording for various reasons known only to themselves. Some of these potentially create situations in which one might be tempted to abuse the priviledge of being given special tax treatment (in exchange for limiting their reach to the "underservered") in exchange for higher profits and/or management fees.

edit: Please excuse me if I have a hard time telling the difference between today's CUs and 1980s S&Ls.

I guess the NCUA coverage is per account not per SS number if a member belongs to more than one CUs?

nycll said: I guess the NCUA coverage is per account not per SS number if a member belongs to more than one CUs?

Excellent question and one frankly I'd never thought about.

http://www.ncua.gov/Publications/brochures/insured_funds/YourIns...

The answer is on page 10. The insurance applies separately to each credit union you are a member of.

So, lets say I go ahead and join the CU with the good 1 year CD rate. (I lie and say I don't belong to another one.) Could they let the money sit in their institution for that year, then at maturity refuse to pay my interest because they found out that I lied?



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