In a bid to remove a hurdle to recruiting new members, Boeing Employees Credit Union (BECU) has adopted a new minimum account balance: $0.
Long-standing tradition—and regulations in certain states and for federal charters—have called for consumers who wish to join a credit union to open a deposit account and maintain a minimum balance in that account. Most often, that minimum balance is, indeed, minimal: $5 is extremely common, but some CUs do require slightly bigger amounts such as $10 or $20.
But some states' laws, including Washington, where BECU is headquartered, don't specify any dollar amount, and the $15 billion institution is taking advantage of that to make it even easier to join.
Commencing June 22, an individual can gain membership in BECU without having a funded share account. As BECU's Todd Pietzsch explained, having a share account is still a requirement; the difference is that "we do not require the account [to] be funded." For existing members, this means they will no longer see the familiar $5 "hold" on their accounts.
However, the change will not impact the voting or ownership structure of the credit union, BECU added, explaining that all members are still owners with one vote. In addition, members with a zero balance on their accounts will be eligible to receive any financial product from the credit union.
"We continually look for ways to enhance the experience and value proposition for our current and future members," said Doug Marshall, BECU's SVP-member channel and service delivery, in a statement. "This change makes it easier than ever for new members to join and take steps to achieve their financial goals. And, current members now have greater flexibility in managing their accounts."
No Funds, No Problem
Pietzsch said the goal of the new policy—which was created by an in-house "member experience" team—is to make it easier for future members to join and have immediate access to the products and services they want without having to wait for the account to be funded. "As the [new] members will be able to fund the account when it is convenient for them, employees will be able to focus their attention on meeting the member's needs," Pietzsch said.
BECU said it was unaware of any other credit union where the share account minimum balance requirement has been eliminated.
That may be due in part to the fact that federal charters are barred from doing this.
The National Credit Union Administration (NCUA), said that in order to be considered a full member of a federally chartered credit union, a person must have an account with a minimum balance at the credit union—it's one of the key membership requirements.
"It can be any [kind of] account," said NCUA Communications Specialist Ben Hardaway. "Traditionally, it's a share account, or a traditional savings account, which is often the most basic account type offered by a credit union. However, it can also be a share draft account, for example." He added that credit unions also offer IRAs, Keogh accounts and trusts in addition to savings and checking accounts.
And, naturally, to qualify for credit union products—most notably various types of loans—a member must have an account with a nominal minimum balance, usually, $5 to $25 and be in good standing.
"A person must open an account with a minimum balance—typically $5—to become a member of a federally chartered credit union," NCUA Public Relations Specialist John Fairbanks said. "And a member must maintain that minimum deposit to be a member in good standing. Other accounts can hold a zero balance, but that minimum deposit must be there."
As a state-chartered credit union, BECU follows slightly different rules than those institutions with federal charters.
Patrick Keefe, director of communications at the National Association of State Credit Union Supervisors (NASCUS), said that for state-chartered credit unions, the requirements related to opening—and funding—a deposit account in order to join "varies from state to state."
According to the compliance department at the Northwest Credit Union Association (NWCUA), in the state of Washington, state-chartered credit unions are not required to charge a membership fee or require a share account. "It will be dependent on each credit union's individual bylaws, but as long as the member meets the membership requirements laid out in the bylaws for the credit union, they can join the credit union," NWCUA said.
Lynn Heider, NWCUA's vice president of public relations and communications, further cited Washington state law, which simply states that: "A credit union may admit to membership those persons qualified for membership as set forth in its bylaws."
In neighboring Oregon, she noted, the rules are similar. In that state, a credit union's bylaws will determine if a share requirement is needed, or if the credit union requires a membership fee.
But is it such a big deal that BECU has waived funded accounts for membership? Mike Schenk, vice president of economics & statistics for the Credit Union National Association (CUNA), doesn't think so.
"I don't see what the big difference between having no money in a share account versus having $5 or $10 in it," he said. "The minimum balance requirements for share accounts are so small as they are, that I don't think BECU's new policy is all that drastic."
The Big Picture
Though it may not be drastic, it is part of an overall effort at BECU to drive membership growth and improve member satisfaction.
"This change is one in a series of enhancements that BECU has made recently to improve the member experience and value proposition," the credit union said, noting other changes include adding auto loans to its annual re-price program that automatically lowers the interest rate on loans for qualifying members.
What remains to be seen: just how big of a hurdle that minimum balance requirement really is.
BECU said the goal of the new policy is to promote membership growth by making it easier to join. The 950,000-member credit union will be tracking new membership enrollment "across all of our channels as well as the feedback we receive from members and staff" on the new policy, which will help BECU gauge whether it succeeds in boosting membership.
