Little-Known Way to Qualify for Navy Federal Credit Union Membership

UPDATE 5/15/17: Navy Federal Credit Union has removed this method of qualifying for membership. Joining the Navy League, San Diego Council will no longer qualify you for Navy Federal membership.

Last week’s news of the hot CD special at Navy Federal Credit Union helped to uncover a way to join the credit union. In that Navy Fed blog post, commenters mentioned that you can qualify for Navy Fed membership by joining the San Diego Council of the Navy League. Anyone can join the San Diego Navy League. This method isn’t mentioned on Navy Fed’s website. However, I did receive confirmation from a Navy Fed CSR via online chat. Other commenters have also received similar confirmations, and a few have reported success in obtaining Navy Fed membership.

Here are the steps to join Navy Fed via the San Diego Council of the Navy League. This is based on what I received from an online chat with a Navy Fed CSR and from comments from several readers.

1. Join the Navy League, San Diego Council. Refer to the Navy League membership page for details. The minimum membership cost is $25 for their E-Membership. The “join/renew” green button at the top right of the Navy League membership page begins the online application. In this application, make sure to enter “San Diego” in the “preferred council” box.
2. Gather proof of your San Diego council Navy League membership. I was unable to get details from the Navy Fed CSR about the required documentation. One reader said he included the Navy League welcome email (which included a copy of the online application and credit card payment information). The reader also said they seem to be looking for the source of the welcome email, payment made and the election of the San Diego Council.
3. Complete the Navy Fed paper application instead of the online application. This is what I was told by the Navy Fed CSR. The paper application is available here (PDF).
4. Email or fax the filled-out paper application and the documentation proving your eligibility through the San Diego Navy League. A Navy Fed CSR provided the fax number 1-703-206-4600 and the email address [email protected]. Readers have reported success by using this email address.
5. To expedite the application process, call Navy Fed. A reader said he called and was able to get a CSR to locate the emailed documents and have them reviewed while he waited. The CSR was then able to open the accounts. Once the accounts are opened, you can make your first deposit by phone with the help of the CSR.

Since Navy Fed representatives are providing information on this backdoor, I consider this as a legitimate method of gaining Navy Fed membership. You’re following the rules as disclosed by a Navy Fed representative. If you want to confirm this backdoor yourself, you can call Navy Fed or perform an online chat.

Why is Navy Fed making it so hard for anyone to join? Backdoor methods to gain credit union membership have long been controversial. Bankers have been fighting to end the credit union tax exemptions, and bankers have been using this membership issue as a reason why the tax exemption should end. This NY Times article has an insightful overview of this controversy. The bankers complaints may have had an impact on the NCUA. In 2013 the NCUA began cracking down on federal credit unions that were advertising that they were open to all.

History of Navy Fed’s Membership Rules

This backdoor may be related to Navy Fed’s acquisition of USA Federal Credit Union in 2010. USA Federal Credit Union was headquartered in San Diego, and before the acquisition, USA Fed was well known as an easy-to-join credit union. However, the Navy League wasn’t the well-known association to join for USA Fed membership. It was the Prime Meridian Association, and Navy Fed did not add this association into its field of membership (perhaps due to the bad publicity this association received in this NY Times article.)

I’ve monitored Navy Fed’s website closely since I began writing about the credit union in 2006. The eligibility section of Navy Fed’s website has always limited membership to those who have military affiliation. The last big change to eligibility was in 2008 when membership expanded to include all branches of the Armed Forces.

As the largest credit union in the nation, Navy Fed probably doesn’t see the need to aggressively pursue new members. There’s little to gain with promoting a backdoor to membership, and there’s a lot of potential bad publicity if the backdoor makes news.

Will It Last?

Due to the controversial nature of the backdoor and the lack of Navy Fed documentation of this backdoor, I wouldn’t be surprised if this backdoor disappears at some point in the future. At the very least, Navy Fed may change the rules of what’s required. If you do try to join Navy Fed via the Navy League, please comment on your experience.