Wednesday, August 13, 2014

Is Arizona FCU $3 Per Month Membership Fee Legal?

A 1993 National Credit Union Administration (NCUA) legal opinion letter would suggest that a monthly membership fee may be illegal.

The legal opinion letter was in response to a request from the Wisconsin Credit Union League on whether a FCU could pass along its League dues to its membership inthe form of an annual assessment. NCUA stated that this practice is impermissible.

NCUA analysis found that Section 109 of the FCU Act allowed FCUs to charge "a uniform entrance fee if required by the board of directors" when becoming a member of the FCU.

The letter goes on to state that "no annual membership fees of FCU members may be assessed except for the initial entrance fee."

I would presume that the same would apply to a monthly membership fee.

I did not find any subsequent letter that overturned this opinion.

If the assessment of a monthly membership fee is illegal, NCUA should require Arizona FCU to cease and desist from this practice. It should also require Arizona FCU to reimburse all monthly membership fees paid by members.

It seems that there may be a class action lawsuit that is waiting to be filed.

Read the letter.
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