A client of mine asked me today whether or not the credit union could create a fee to its membership that would pick up approximately one third of the cost of the assessments NCUA has given them. While this blog is not about giving legal advice it is certainly about sharing information (and my creative client wholeheartedly supports sharing this idea).
When a credit union wants to institute a new fee, it needs to do a change in terms notice. Take a look at the NCUA Rules and Regulations Part 707, Truth in Savings in §707.5:
(a) Change in terms.
(1) Advance notice required. A credit union shall
give advance notice to affected members of any change
in a term required to be disclosed under § 707.4(b), if
the change may reduce the annual percentage yield or
adversely affect the member. The notice shall include the
effective date of the change. The notice shall be mailed
or delivered at least 30 calendar days before the effective
date of the change.
Thus, in theory, a credit union could give 30 days notice to its members about the imposition of a new, annual “NCUA Fee” (or whatever you want to call it) applicable to every share account. It is an interesting thought and there is more to it with respect to calling attention to the fee change in the notice to members, etc. Also, I’m not one to advocate increasing members fees, however, if the credit union is facing oblivion in the face of assessments, a new fee to members is certainly preferable to the credit union ceasing to exist.
Please remember that you’re reading this on a blog. If you want to explore this concept as a possibility, please do your due diligence before moving forward with it.
Edit: Also take a look at this NCUA Opinion Letter (thanks Anthony). NCUA doesn’t like the idea of league dues being passed on directly. However, NCUA assessments are not dues and this does not have to be characterized as a membership fee. Moreover, even if a Federal Credit Union could not create an “NCUA” fee, it could certainly raise other fees to create more revenue.