Will stiff minimum balances for credit union members play in Peoria? Citizens Equity Federal Credit may soon find out.

The credit union, one of the nation's largest, is considering a plan to drop any customer whose deposits and loans together do not exceed $4,000. More than one-quarter of the institution's 206,000 members wouldn't make the cut.

The proposal is highly unusual for a credit union; most have no minimums at all. But executives of Peoria-based Citizens are clearly gung-ho on the plan. Their aim, they say, is to keep fees low for most members by losing the ones who simply are not profitable.

John T. Siefken, chief executive, said he expects the proposal will be implemented early next year, after a vote of the membership. He said he has received largely positive feedback from members.

"Reaction has been two-to-one in favor of our stand," he said. "I think most of our members expect everyone to carry their own weight."

While many banks and thrifts have been increasing fees on low-balance deposit accounts and other services deemed unprofitable, credit unions have shied away from the strategy. Indeed, the industry often promotes itself as a haven for savers and borrowers of modest means.

"I haven't heard of anything like this before," said Robert E. Loftus, a spokesman for the National Credit Union Administration. "Basically credit unions are democratic cooperatives and the members run them, so if the members wanted to do it, I guess they could."

In a letter addressed to members of Citizens Equity, Chairman Robert Loveless said the move would "eliminate much of the subsidization" that is taking place at the credit union.

Writing in the credit union's quarterly publication, Mr. Loveless said 70% of the credit union's members are supporting the 30% who don't have at least $4,000 in business with the institution.

"Some members use CEFCU for its free services and take most of their loans and savings elsewhere," he said.

The proposal, however, would spare members over 62 years of age or those with limited incomes.

Mr. Siefken said the proposal isn't a move to boost profits. Rather, he said, the aim is to increase free and low-cost services. Without such a move, the credit union might have to raise fees, he said.

"Profit is not a motive here," Mr. Siefken said. "Our objective is not to introduce fees, but to get people to change their behavior."

The move could generate bad press for Citizens Equity and help competitors, said Robert L. Denton, president and chief executive of South Side Trust & Savings Bank, Peoria.

"Credit unions say their out to help the little guy, but this sure doesn't sound like it's helping the little guy," Mr. Denton said. "It's unusual and it seems harsh."

Donald A. Hanson, chief executive of Steinbeck Federal Credit Union, Salinas, Calif., said his institution wouldn't embrace such a tactic. But he didn't want to judge the decisions of another institution.

"You have to look at specific details behind the credit union to make a judgment," he said.

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