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Law Clarifies Credit Union Membership

By Jim Garamone
American Forces Press Service

WASHINGTON, Sept. 21, 1998 – Federal credit unions can continue doing business as usual thanks to legislation President Clinton signed in August.

The act follows a Supreme Court ruling in February 1998 that said the National Credit Union Administration incorrectly interpreted a 1982 law and allowed credit unions to add members from outside their core constituencies.

Had the court ruling remained in force, credit union members might have had to leave their credit union once they left that core group. Credit unions core groups are based on occupation or geography. For example, a Navy Credit Union member who left the Navy -- or took a civilian job outside the Navy department - - would have had to leave the Navy Credit Union.

Congress disagreed with the Supreme Court and overwhelmingly passed legislation clarifying its original intent. "Now legislation says once you join a credit union you can be a credit union member for the rest of your life," David C. Lundahl, president, Defense Credit Union Council Inc., said here.

Further, the legislation allows credit unions to recruit outside their core groups if the new groups are less than 3,000 people each. The new groups do not have to share a bond with the core membership -- a departure from past practice.

Lundahl said the changes strengthen military credit unions and will allow them to survive in an era of downsizing. More than 5 million federal employees and their families are members of credit unions.

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