According to Call Report data, 375 credit unions paid higher interest rates to nonmembers on their deposits than to members at the end of the third quarter of 2015.
The analysis examined reported dividend (interest) rates at credit unions. Deposit accounts examined include nonmember accounts, share drafts, share certificates, money market shares, IRA/Keough accounts, regular shares, and all other shares.
The analysis did not look at the number of nonmember deposit accounts or the dollar volume of these deposits.
The analysis found that the dividend rate on nonmember accounts was higher than the reported dividend rate across all types of member accounts at these 375 credit unions.
Coastline Federal Credit Union (Jacksonville, FL) reported the highest interest rate on a nonmember deposit at 6.8 percent. The best dividend rate on a member deposit was 1.09 percent on share certificates.
Numerica Credit Union (Spokane Valley, WA) had the next highest rate on nonmember deposits. The $1.5 billion credit union reported an interest rate of 3.92 percent on nonmember deposits. The best reported rate to members was 1.42 percent on IRA/Keough accounts.
Twenty-eight credit unions with assets in excess of $1 billion reported paying better rates to nonmembers versus members on deposits.
Large credit unions with more than $5 billion in assets that are reporting paying better rates to nonmembers than members include: Navy Federal Credit Union (Vienna, VA), Security Service Federal Credit Union (San Antonio, TX), First Technology Credit Union (Mountain View, CA), and ESL Federal Credit Union (Rochester, NY).
It is dumbfounding that nonmembers are getting better rates on their deposits than credit union members.
In my opinion, paying nonmembers a better rate on their savings than members is clearly a misuse of the credit union tax exemption.
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Since these folks are not credit union members - they must be bank customers. That is wonderful.
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