Monday, May 16, 2011

I'm Not a FAN of $10 Donation to Join A Credit Union

A Washington, D.C. area credit union is using an association to circumvent its field of membership limitations.

Northwest Federal Credit Union of Herndon, Virginia states on its website: "If you find you are not eligible to join NWFCU via the relationships defined above, we can approve your membership with enrollment in the Financial Awareness Network (FAN), an organization dedicated to promoting and supporting financial education."

Financial Awareness Network membership is open to anyone ages 13 and older. To join, you need to pay a one time $10 membership fee. This immediately qualifies you for credit union membership.

FAN was established on March 3, 2010 with the stated goal of promoting and supporting financial education, which is laudable.

But when I looked into FAN, I found that three of the six directors are either employees of Northwest Federal Credit Union or employed by the credit union's foundation, NWFCU Foundation. The three directors are Barbara d'Andrade (Outreach Manager for Northwest FCU), Phyllis Ziakas (VP of HR & OD at Northwest FCU), and Linda Rogus (Executive Director of NWFCU Foundation).

Additionally, events conducted by FAN were in conjunction with the NWFCU Foundation.

This leads me to believe that this association is an extension of the credit union and is meant to easily qualify the public for membership.

The reality is for a $10 donation, you can belong to Northwest FCU. The credit union's common bond is anyone living in the United States, which makes a mockery of the concept of common bond.

The Internal Revenue Service should revoke Northwest FCU's tax exemption, as Northwest FCU is a credit union in name only.


  1. You act as if this is the first time you have seen this creative way to open-up membership eligibility. Why are you so worked-up over it? While I can't say for certain, it seems like a great way to meet two goals: expand membership (focus on growth, which is good for everybody) and promote financial literacy (good for the community).

  2. While the associational common bonds are permissible, they are being abused by some credit unions as a ruse to make membership open to the general population. This seems to me to violate the spirit of what is a credit union.

  3. In many ways credit unions are open to the general public. If a member is interested and motivated enough in joining a particular credit union they can get a job at a sponsor company, move to a geographic area the CU serves, or join a church in the area. Additionally, they can join through eligible family members. The point being that credit unions shouldn't be exclusive clubs (as much as many bankers would like); they are open to people of a common bond. This is another example of a common bond.

  4. to anonymous above, you're kidding right? join a different church or move to new neighborhood to enable joining is the SAME as being handed a slip of paper to sign and paying 10 bucks.
    credit unions are cheating on field of membership rules (according to credit unions of all sizes who have shred this fact openly) because their fields are still highly restrictive..."i want everything the bank has but I dont want to pay taxes!"

  5. "Everything the bank has?" Do banks have a 12.25% limit on business loans? Do banks have a prohibition against giving directors special loan benefits that are not available to the general public? Are the banks paying special assessments to cover the costs of failed banks? The answer to these questions is NO!!!

    Will the bankers allow credit unions full authority and powers if credit unions pay full corporate taxes? Even then banks will have the S Corp status option that will not be available to taxpaying credit unions.

  6. what if i do not get the card, am can i get money 10 bucks back>?



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