Newsroom
March 24, 2017
NAFCU Compliance Blog talks membership and par value
NAFCU Special Counsel for Compliance and Research Pamela Yu offered an overview of the basics of credit union membership and par value – or the face value of a member's share – in today's Compliance Blog.
"The Federal Credit Union (FCU) Act requires that federal credit union members 'shall each subscribe to at least one share of its stock and pay the initial installment thereon and a uniform entrance fee if required by the board of directors,' " Yu wrote. "The par value of the required member share is established by each credit union in its bylaws."
"There is no regulatory minimum or maximum amount for credit union shares, and par values are often nominal – but sometimes not," she continued. "Oftentimes, a credit union wants to increase its membership, but it is concerned that the cost of the par value share may discourage new members."
Yu notes that credit unions are not allowed to advance payment of the par value to potential members, because credit unions are not authorized to extend credit to people who have not yet become members. However, the NCUA has issued legal opinions indicating that a credit union may pay the initial share from its own funds on behalf of potential members to begin their credit union membership.
"The Federal Credit Union (FCU) Act requires that federal credit union members 'shall each subscribe to at least one share of its stock and pay the initial installment thereon and a uniform entrance fee if required by the board of directors,' " Yu wrote. "The par value of the required member share is established by each credit union in its bylaws."
"There is no regulatory minimum or maximum amount for credit union shares, and par values are often nominal – but sometimes not," she continued. "Oftentimes, a credit union wants to increase its membership, but it is concerned that the cost of the par value share may discourage new members."
Yu notes that credit unions are not allowed to advance payment of the par value to potential members, because credit unions are not authorized to extend credit to people who have not yet become members. However, the NCUA has issued legal opinions indicating that a credit union may pay the initial share from its own funds on behalf of potential members to begin their credit union membership.
Share This
Related Resources
Add to Calendar 2024-05-03 14:00:00 2024-05-03 14:00:00 Plan Sponsor Attitudes Toward Retirement Plan Management and Fiduciary Outsourcing About the Webinar In January 2024, Pentegra conducted a survey of retirement plan sponsors and their perspectives on retirement plan management and fiduciary outsourcing. The survey measured how sponsors are using fiduciary outsourcing to help better manage their retirement plans. It also captured their perspectives on what outsourcing does to help them better position their plans and drive improved retirement plan outcomes. Key Takeaways: What is the full scope of your responsibilities as a plan sponsor? What is fiduciary outsourcing and how does it work? How does fiduciary outsourcing help reduce workloads and minimize risk? How can a credit union best position its plan to drive improved outcomes? Register Here Web NAFCU digital@nafcu.org America/New_York public
Plan Sponsor Attitudes Toward Retirement Plan Management and Fiduciary Outsourcing
preferred partner
Pentegra
Webinar
Turning Lemons into Lemonade: Capitalizing in a Post-Banking Crisis Era
Strategy
preferred partner
Allied Solutions
Blog Post
Ensuring Safety and Soundness with AI
Management, Consumer Lending, FinTech
preferred partner
Upstart
Blog Post
Add to Calendar 2024-05-02 14:00:00 2024-05-02 14:00:00 Mastering Resilience in Incident Response Plans About the Webinar An Incident Response (IR) plan is crucial for guiding credit unions through major incidents efficiently and effectively. However, many IR plans lack resilience, making them less adaptable to the evolving threat landscape. Join us for our webinar Mastering Resilience in Incident Response Plans where DefenseStorm cyber experts Elizabeth Houser and James Bruhl will delve into the importance of resiliency within cybersecurity IR plans. Don’t miss out on the opportunity to learn how to: Ensure IR plan accessibility so that all team members with assigned roles are prepared for effective incident response. Conduct efficient and regular reviews to ensure roles and responsibilities are current, tools are relevant, and compliance requirements are met. Implement and utilize tabletops to regularly test the effectiveness of your IR plan. Enhance preparedness, efficiency, and confidence among responders. View On-Demand Web NAFCU digital@nafcu.org America/New_York public
Mastering Resilience in Incident Response Plans
preferred partner
DefenseStorm
Webinar
Get daily updates.
Subscribe to NAFCU today.