Updates to the All-Access Credit Union List and Potential Issues

In the last couple of months I've come across a few more credit unions that make it easy for anyone to qualify for membership. These credit unions have added associations to their fields of membership which allow anyone to join. Once you join the association, you are then eligible to join the credit union. I call these all-access credit unions, and I have a big list of these all-access credit unions which currently totals 79.

New all-access credit unions give savers more options for higher CD, checking and savings account rates. That's the case with some of these four credit unions which I just added to the big list:

• SCE Federal Credit Union - Irwindale, CA
• Aspire Federal Credit Union - Clark, NJ (online application)
• American Heritage Federal Credit Union - Philadelphia, PA (online application)
• First Flight Federal Credit Union - Cary, NC (online application)

Credit unions will need to be more discreet in describing this type of open membership. As I reported last month, the NCUA is warning credit unions that they should not have open membership and they should not be advertising open membership. The associational common bond is allowed by the NCUA, but there are several requirements. Fortunately, some of these requirements are not straightforward which should prevent the NCUA from forcing these credit unions to change their fields of membership.

A good example of a credit union not being discreet is SCE Federal Credit Union. I found out that this credit union is all-access from the banker’s blog Credit Union Watch. This blog pointed out potential violations of the NCUA orders that appear on SCE Federal Credit Union’s membership page.

As you might expect, bankers consider open fields of membership as unfair competition since credit unions receive tax breaks. This 2010 New York Times article reported on this issue and the history of how large credit unions like PenFed evolved into an open membership. I’m much more concerned with the unfairness of today’s suppression of interest rates than the unfairness of all-access credit unions. All-access credit unions give savers more options for finding higher deposit rates. So I hope the NCUA won’t force any of these credit unions to remove their associational common bonds. However, with bankers on the lookout, I’m afraid the NCUA may be forced to act. That may cause us to lose some of the credit unions on the big list. If you come across a credit union on the big list that is no longer easy to join for non locals, please leave a comment.