Navy Federal Credit Union of Vienna, VA, and USA Federal Credit Union (USA Fed), based in San Diego, CA, announced today that they have agreed to merge operations. The Board of Directors of each institution has approved the merger. The newly combined credit union will begin joint operations under the Navy Federal banner projected to be October 1, 2010 pending regulatory approval by National Credit Union Administration, (NCUA).
According to Navy Federal's FAQs:
All USA Fed members will become Navy Federal members.
As I mentioned yesterday, I'm not sure if Navy Federal with add USA Fed's field of membership to their FOM after the merger. It would be nice if they did because USA Fed currently makes it easy for anyone to join. Here is what USA Fed has in its membership page as of 9/23/2010:
If you are not eligible to join through one of our sponsor groups below, don’t worry, you can qualify for membership by joining the Prime Meridian Association. It’s only $5.00 to join this not-for-profit organization and available to join through our online Membership Application.
One reader emailed me yesterday and asked if it made sense to join USA Fed now so that she could become a Navy Federal member. Based on the FAQ above, this may be a good idea if you want to join Navy Federal. Navy Federal has a long history of competitive CD and IRA CD rates. Unlike PenFed, Navy Federal has higher rates for $20K and $100K deposits. Here's a short comparison of the CD rates as of 9/23/2010:
- 5-year CD: PenFeds's 2.75% APY $1K min vs. Navy Federal's 3.00% APY $100K min, 2.90% APY $20K min and 2.80% APY $1K min
- 7-year CD: PenFed's 3.49% APY $1K min vs. Navy Federal's 3.55% APY $20K min, 3.45% APY $1K min
Another thing to consider is that it may take a while before USA Fed members receive access to all of Navy Federal's products. According to the merger overview:
The process of consolidating operations will begin October 4, 2010, and will take some months to complete.
It should be interesting to see what happens to Navy Federal's FOM after the merger. Unlike PenFed, Navy Federal has kept its field of membership limited to those with a military connection. In 2008 Navy Federal expanded their FOM to include not only members of the Navy but also all branches of the Armed Forces. Expanding membership to everyone who pays to join that association may be problematic. In June the New York Times article Credit Unions Are Beckoning With Open Arms looked at credit unions that make it easy to join and how this has created controversy with the banks. USA Fed and its Prime Meridian Association were actually mentioned in the article. Since Navy Federal is the largest credit union in the nation, they may not want to get involved in this controversial issue.