Can Age Be the Basis of CU Membership?
Life may begin at 50 but that can’t be the only reason someone qualifies for credit union membership. That is the gist of a recent opinion letter issued by NCUA. As of yesterday afternoon it wasn’t available yet on NCUA’s website but Keith Leggett was nice enough to forward me a copy after I read about it in his Credit Union Watch blog (http://creditunionwatch.blogspot.com/2016/03/commonality-of-age-is-not-permiisible.html ).
Keith is the self-described Captain Ahab to the credit union’s White Whale. Even though he has retired, he continues to write his blog for the American Bankers Association, which is obsessed with keeping credit union field of membership requirements as restrictive as possible lest more consumers be able to choose a credit union to meet their financial needs.
In any event, in response to an inquiry by Keith NCUA opined in a February 25th legal opinion letter that a federal credit union cannot create a field of membership comprised solely of persons over the age of 50 who live in a specific state. At the same time, NCUA stressed that were a group to share commonalities in addition to age and geography such a field of membership might be appropriate.
While the decision is problematic for any credit union that has such a field of membership, it also highlights a potential growth opportunity for credit unions. Specifically, since Baby Boomers are the largest group of retirees in our nation’s history, have plenty of money, and they are willing to spend it this is an area of potential growth that common bond credit unions should consider.( https://newyorksstateofmind.wordpress.com/2016/02/24/does-debt-like-fine-wine-get-better-with-age ) .
For instance, while qualifying someone who lives in New York and is 50 or older is a no-go it certainly seems appropriate to have a field of membership composed of persons 50 years of age or older who live in New York and belong to an Association dedicated to advancing the social and political interests of older Americans. After all, according to NCUA’s Chartering and Field of Membership manual an associational common bond consists “of individuals (natural persons) and/or groups (non-natural persons) whose members participate in activities developing common loyalties, mutual benefits, and mutual interests. “ In addition the manual notes that a group consisting of associational members need not be limited to serving a specific geographic area.