Tuesday, September 23, 2014

AgFed Using Group to Circumvent FOM Limitation

Washington, D.C.-based Agriculture Federal Credit Union (AgFed) must stop advertising that “everyone is welcome” to join, ABA said in a letter on September 22 to the National Credit Union Administration.

ABA cited AgFed’s website, which says “Everyone is welcome. Join today.” AgFed invites ineligible individuals to join by becoming members of CityDance for $20.

ABA urged NCUA to order AgFed not to advertise that everyone can join and to conduct a quality assurance review of CityDance to ensure that it truly meets the associational common bond requirement.

NCUA last year warned credit unions to avoid “overly aggressive marketing campaigns ... providing consumers with misleading information about single and multiple common bond membership requirements.” The agency is also conducting reviews of third-party groups that CUs use to circumvent common bond requirements.

Read the letter.
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