Recent controversy over a credit union account opened to help the family of convicted Stanford University student Brock Turner got some in the industry questioning whether and how credit unions can refuse services to members, and it appears credit union boards play a big role in determining the answer.

The controversy centered around the Beavercreek, Ohio-based Wright-Patt Credit Union, which faced harsh public criticism a few weeks ago after Turner's father set up a legal support fund there. Turner, 20, was accused of sexually assaulting an unconscious woman behind a dumpster on the Stanford campus. Earlier this month, he was sentenced to six months in jail plus three years of probation.

The sentence, which some said was too light, sparked an outcry against the judge in the case, Turner's parents and later Wright-Patt, which has $3.3 billion in assets and 321,000 members. Wright-Patt later posted a Facebook message that read in part: "Wright-Patt Credit Union is aware of the account in question that was established as a legal support fund by the father of an individual convicted of sexual assault in California. When opening a new account, we confirm the membership eligibility and qualifications of the account owner in adherence with our bylaws and applicable law. Beyond that, we respect the privacy of our members and their intended use of the account."

In a CU Times poll about the Turner story, 42% of respondents said they would refuse on moral grounds to open defense funds for people accused or found guilty of high-profile, serious crimes. Another 21% said they would refuse because they didn't want to risk the bad publicity.

But saying no isn't always that easy, according to Attorney E. Andrew Keeney of Kaufman & Canoles in Norfolk, Va. Many credit unions worry that refusing to open an account could be perceived as discriminatory, which could mean litigation, he noted.

"At the present time, my clients are aware of the situation and they're opening up accounts without restriction, because they don't want to end up being accused of unfair treatment," he said.

According to two regulators, an important consideration could be the language that goes into account agreements, membership agreements, and policies and procedures, which often require board approval.

"In terms of whether a federal credit union could or could not refuse an account, [the] NCUA does not dictate business decisions to credit unions," NCUA Public Affairs Specialist John Fairbanks told CU Times. "As long as a credit union has a rational business purpose behind its decisions, treats members uniformly and consistently, does not discriminate and operates in a safe and sound manner, [the] NCUA, as a regulator, won't tell it how to run its business."

Kerry Francis, director of communications at the Ohio Department of Commerce, which regulates the state chartered Wright-Patt, had similar comments.

"I checked into this, and pursuant to the Ohio Revised Code, and absent any federal law, rules, or guidance to the contrary, a credit union is authorized to receive funds for deposit in accordance with such terms and conditions as may be established by its board of directors," she said.

The Bank Secrecy Act and creditworthiness concerns provide some ways for credit unions to refuse membership or service, Keeney added, but taking care to review the denial of service language in account and membership agreements might go a long way.

"That way you don't wring your hands," he said.

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