Would your members pay to make deposits to their credit unionshare accounts? That's a question that soon may be up for debatedepending on what happens at the next Federal Reserve Boardmeeting.

The continued sluggish economic recovery is causing the Fed toconsider policy changes designed to better stimulate the economy.The Fed's Open Market Committee discussed several scenarios at itsOct. 29-30 meeting, including cutting the 0%-0.25% rate the Fed currently pays banks andcredit unions on the $2.5 trillion in financial institutionreserves being held at the Fed.

Several banks already have indicated that if the rate is cut,they may start charging depositors to cover the cost of depositinsurance federal regulators charge them. Some credit unioneconomists argue that a “negative interest” scenario likely willnot happen and, even if it does, the impact on many institutionswill be limited to nonexistent.

“Talk of cutting the reserve ratehas been around for a couple of years and it pops up every nowthen,” said Dwight Johnston, chief economist for the California and NevadaCredit Union Leagues in Ontario, Calif.

Johnston believes such a change, if it ever occurs, would be along time coming. “If the Fed does act on it, I don't see it havinga huge impact on credit unions because big money center banks wouldbe the first to test the waters.”

Credit unions with strong loan programs could withstand a cut inFed rates without having to charge depositors a fee, since theywould be able to make up the difference from loan revenues,Johnston said.

Small cash-heavy credit unions, on the other hand, mightconsider reducing deposits by charging for them as an effectivestrategy to curb the wrong type of financial growth, the leagueeconomist said.

“A credit union's response will depend totally on its balancesheet, ” Johnston said. “You can't shrink your way to long-termgrowth, but you can do so from time to time to preserve yourcapital and increase net earnings.”

Many don't think the Fed has any intention of cutting rates tostimulate growth. In fact, such a move would bedetrimental to the overall market and consideration of it littlemore than sabre rattling by an agency charged with stimulatingeconomic growth, according to Brian Turner, director and chief strategist for CatalystStrategic Solutions, part of Catalyst Corporate Federal CreditUnion in Plano, Texas.

“The problem the Fed has is that economic growth, especiallyconsumer spending behavior, is not rate-sensitive,” Turner said.“Members continue to suffer job insecurity and have been curtailingtheir spending, particularly on big-ticket items such as cars,homes and appliances, all items to which credit unions extendfinancing,”

The final verdict on this and other potential measures may bediscussed at the Fed's upcoming meeting Dec. 17-18. Until thattime, experts can only speculate on how the Fed's next steps willaffect their institutions.