ALEXANDRIA, Va.-NCUA Associate General Counsel Sheila Albin stated that credit unions can increase the par value of a share for new members with reason. U.S. Postal Service Federal Credit Union in Clinton, Md. proposed to NCUA that it would like to maintain a par value of $5 for existing members but increase the amount for new members. The credit union is looking to increase its share-to-asset ratio to absorb loan application costs and generate higher dividends and lower loan rates. “The basis for retaining the $5 par value for existing members is to avoid potential confusion or hardship for them if existing members with balances below a new par value were required to increase their deposits to the new par value,” Albin wrote in legal opinion letter 04-1205. U.S. Postal will not limit services to existing members with $5 par value shares. The Federal Credit Union Act and the Bylaws do not prohibit higher par values for new members. Additionally, she noted, NCUA has previously permitted a different par value for minors’ accounts. “Arguably, your proposed policy is not creating separate classes of members, but rather, “grandfathering” or protecting current members from an increase in the requisite par value,” Albin stated. “In any event, we note your credit union has a rational basis for increasing the par value of a share for new members and for maintaining the $5 par value for existing members.” She cautioned that credit unions should consult local counsel to ensure compliance with state or federal laws. “We caution that any policy that treats members differently could be subject to challenge under state and federal anti-discrimination laws,” Albin concluded.

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