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ALEXANDRIA, Va.-According to the circumstances outlined in an NCUA legal opinion letter, a credit union is attempting to determine whether it can keep a former employee charged with defrauding the credit union from remaining a joint accountholder. A federal credit union can limit the ability of its members to name persons as joint accountholders if it has “a reasonable basis” for such a move, establishes the policy in writing, and ensures the membership is aware of the policy and it does not violate nondiscrimination laws, such as the Equal Credit Opportunity Act, according to a new NCUA legal opinion letter (05-0723). A former employee of the non-disclosed credit union voluntarily gave up her individual account after being charged with a felony for defrauding the credit union while working there. Though no longer a member, she remains as a joint accountholder on an account with a family member and uses the account for financial services. “The FCU has a written policy stating it can withhold credit union services from any member causing a loss to the FCU and, under this policy, it would like to restrict the former employee’s access to services permanently,” NCUA noted. “In the situation you present, one way to restrict the former employee from access to services as a joint owner is to restrict the ability of members to name as joint owners anyone who has caused a loss to the credit union.” However, NCUA Associate General Counsel Sheila Albin noted, while the federal credit union’s policy addresses limiting a member who has caused the credit union a loss, this situation would limit a member who has not caused a loss. “An FCU is not required to provide joint ownership accounts and may place reasonable restrictions on the persons that members may name as joint owners. Under the FCU Act, an FCU may issue shares “in joint tenancy with the right of survivorship with any persons designated by the credit union member.” While permissible, an FCU is not required to provide this type of account ownership to its members and, therefore, our opinion is that an FCU can place limitations on a member’s ability to name joint owners as long as it has a reasonable basis,” she wrote. [email protected]

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