05/28/2014 02:01 pm ET Updated Jul 28, 2014

Credit Union Access for All: What Banks Don't Want You to Know

If you know anything about credit unions, you know that typically, prospective members need to meet certain requirements in order to be eligible to join. In recent years, however, credit unions have been broadening their Field of Membership (FOM) qualifications, making it easier for interested individuals to join. Are there truly credit unions that offer access for all?

Membership was defined in narrow terms
Typical membership is traditionally based on group affiliations, like specific employers, churches, and universities. If a candidate doesn't fall into the right category or demographic, they cannot be a member of that credit union.

Membership is more broadly defined now
However, it is a credit union myth to think that credit unions are extremely exclusive. Membership guidelines for credit union eligibility are broadening. For instance, some university credit unions require individuals to take just one course in order to qualify. Going a step further, many credit unions have begun to make specific ties with associations that essentially anyone can join. Any individual considered to be a member of that association can join, and even their membership lapses, they may still remain a member of their credit union.

In fact, according to, the only requirement to join a credit union is "$5 to $10." It says also says that any individual may find a commonality with a credit union, that will then enable them to be included.

The authorities are cracking down
Certain proponents (specifically banks), argue that credit unions which have extremely broad FOM requirements are no longer adhering to the rules. They may be right -- in fact, some credit unions are openly advertising unlimited inclusion.

The National Credit Union Administration recently sent federal credit unions a letter warning against advertising that anyone can become a member. "If your credit union is advertising that anyone, without limitation, is able to become a member of your credit union, then you may be in violation of federal law and regulation."

Though this letter was only sent to federal credit unions and not state-chartered unions, it symbolizes the legal requirement that credit unions need to retain membership based on specific criteria. Given the evidence, it does seem to appear that there are all access credit unions.

Current vs. traditional restrictions
It may be difficult to understand the recent shift of credit unions to attract more members. Ironically, "The Federal Credit Union Act" was enacted during the Great Depression in 1934, and catered to the low-income individuals the banks turned away, or did not want. The credit union model developed to an inclusionary cooperative that catered to specific groups that needed financial services.

Since its inception, credit unions have been viewed as non-profit, meaning they are exempt from many federal and state taxes. For this reason, credit unions must comply with FOM requirements in order to maintain that status. As we've stated before, credit unions are comprised of "members" not customers. For this, they get financial perks such as better rates for things like loans and savings, and in general, have lower fees. At the end of the year, any remaining revenue from dues pooled by the members goes directly back into their pockets.

While credit unions were initially filtered through employers, all-access credit unions now make it easy to join. If you've been considering joining a credit union, doing so may require less work than you may have imagined.

Katherine Muniz is a writer for