Wednesday, March 26, 2014

Disregarding Membership Requirements

I received the following e-mail from a banker who wanted to share her experience about a credit union disregarding membership requirements.

"What was so interesting and really drove home the point, was this weekend, I purchased another car. But this time in Vancouver, Washington (I live in Southern Oregon, so purchasing a car in Vancouver in itself is odd) The dealer ran the financing through a credit union in Washington…that I have no affiliation with…. I paid no membership fee, I didn’t open an account, didn’t sign a “signature card” and honestly I can’t even tell you the name of the credit union…but apparently their membership is so broad that simply purchasing a car in Washington made me, a Southern Oregonian eligible for their membership." (emphasis added)

I hope there are some credit unions that find this development somewhat disconcerting.


  1. Oh dear. Keith, this is not the exception to the rule. It is the rule. We call it indirect lending. The program is set up through the state trade associations. The state trade associations get a "kick back" errr referral fee for every dealership car loan funded. When the car loan pays off the customer/member closes the account. The NCUA never audits compliance with field of membership. If the NCUA audited membership cards to validate eligibility the numbers would drop faster than a prom dress at midnight.

  2. She sounds like she needs to be in another profession or retired. First of all, why would she buy a car in Washington when Oregon has no sales tax? Secondly, as anyone who lives up there knows, there is a lot of commerce between Portland, Oregon and Vancouver, Washington which are right across the border. Thirdly, there's this thing called indirect lending that banks have been doing for decades. It's obvious to anyone with an IQ of over room temperature that the possibility of a Southern Washington credit union could finance a car from someone living in Northern Oregon is extremely high. Portland and Vancouver are in the same geographical area. The fact that they are in different states is irrelevant. State borders are arbitrary at best. Go back to school, lady, or take an early retirement.

  3. Dear Anonymous:

    The banker said she lived in southern Oregon, not northern Oregon.

  4. My question is "why did the banker accept the credit union financing?" I can't believe that the banker is a "moderate-income" person deserving of the benefits of the tax-exempt credit unions. Why didn't the banker use his/her own institution or other local competitor to get the financing before heading hundreds of miles to purchase the car? Could it be the vehicle is from an importer not easily obtained in "Southern Oregon?"

    Where are the inquiring minds on this one?

  5. Remember that this banker could have financed the vehicle with a state credit union. Some state credit unions do not require a share account to be established. Only a membership fee. It is that way for California's state-licensed credit unions. The membership language could have been within the tens of papers signed.

  6. I echo that this is the rule not the exception. I live in Cincinnati (OH-KY-IN borders all nearby) and one of my best friends is a finance manager at a Northern Kentucky Auto dealer. They have photocopies of chruch pamphlets with a Cincinnati Church's adddress that they stick in files so KY and IN residents can become memebers of the Ohio CU.
    This must be the largest church in SW Ohio as according to him they use the same pamphlet 20-30 times a month to "comply" with the CU association rule. It appears this CU (GE) is very serious about checking the validity of association...AMEN!

  7. All this time I thought PTL stood for Praise The Lord...not Pass The Loot!



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