Wednesday, September 25, 2013

Improperly Using an Association to Recruit Members

In a letter on Monday to National Credit Union Administration Chair Debbie Matz, ABA wrote that Kinecta Federal Credit Union in Manhattan Beach, Calif., is “improperly using” a third-party association to recruit members who would not otherwise qualify.

Kinecta allows individuals who are otherwise ineligible to become members by simultaneously joining a consumer group,Consumers Cooperative Society of Santa Monica (CCSSM), and paying a $10 fee that Kinecta passes on to the association.

Kinecta’s online application (see attachment) states “if you are not in any of the categories above, you can join through the Consumers Cooperative Society of Santa Monica. Kinecta will process the enrollment into CCSSM for you. ($10 fee for CCSSM applies).”

“ABA questions whether this transaction meets the requirement of an associational common bond,” the letter said. “Membership . . . needs to be more than the checking of a box on a credit union’s membership application.”

ABA also urged NCUA to notify all federal credit unions about the associational common bond requirement. “Individuals must belong to the association prior to joining the credit union and it is impermissible to sign up an individual for membership in an association at the same time the individual is applying to join the credit union,” ABA said.

Read the letter.


  1. Perhaps the good Doctor does not remember that Kinecta merged the credit union that was organized for members of the Santa Monica Coop. It is as legit as the "late" First Interstate Bank operating in many states (grandfathered) even though interstate banking was illegal. The Coop is every part of Kinecta's FOM as the defense industry that helped found it decades ago.

    You are grasping at straws!!!

  2. You missed the point. You need to belong to the consumer coop before joining the credit union.

  3. OK, let's see, a consumer comes in to join a cooperative financial institution. They join the Consumers Cooperative Society of Santa Monica which makes them eligible to join the cooperative financial institution. No where in anything I've read is there any reference to lenght of time required between step one and step two. Just smart consumers avoiding mega bank abuse. Smart consumer.

  4. Greetings~.I stumbled upon here as I am trying to find out information on this company? My Grandfather had bought stocks and I'm trying to find out what they may be worth.....any suggestions would be very much appreciated!
    Can't seem to apply the photos here but these shares were bought in 1960



The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.