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.
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.
ReplyDeleteYou are grasping at straws!!!
You missed the point. You need to belong to the consumer coop before joining the credit union.
ReplyDeleteOK, 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.
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ReplyDeleteCan't seem to apply the photos here but these shares were bought in 1960