'Once A Member' Policy Not Always So, Reminds Regulator

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OLYMPIA, Wash. — "Once a member, always a member," has long been an assumption of credit union membership rules.

But that's not the case for state charters in this state — and many others — if that member ends the relationship and moves out of a credit union's field of membership, according to a ruling from Linda Jekel, director of Credit Unions for the Washington Department of Financial Institutions.

Jekel's decision follows an inquiry from a state-charter in the Evergreen State inquiring over a situation where member had closed his/her account and had left the credit union for a number of years. The former member wanted to reopen the account, but lived out of state and was not in the credit union's FOM.

"Under once a member, always a member, people can move but keep their account open," Jekel told Credit Union Journal. "But if they voluntarily close their account and move out of state, they cannot rejoin."

The guidance, Jekel added, is similar to an NCUA interpretive letter she found.

In a guidance letter to the credit union that asked about restoring the former member's status, Jekel said for state-chartered CUs to use the "once a member" principle it must be specified in the credit union's bylaws and the credit union must specify requirements for remaining a member, such as maintaining a share account or "other reasonable standards."

However, one day after explaining the new guidance to Credit Union Journal, Jekel followed up with a slight change after discovering that an opinion letter had been issued on the topic 12 years ago.

"It was not my intent to reverse the opinion that we have had out there since 1999," she said. "The part of the guidance regarding the bylaw requirement will be changed. Credit unions may have rules regarding retention of membership as a policy; they are not required to be in the bylaws."

According to NASCUS, the Washington State interpretation is a "commonly held" interpretation among the states. "This is not a big change," a spokesperson said.

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