# Why do credit unions restrict their memberships?

**URL:** <https://boards.straightdope.com/t/why-do-credit-unions-restrict-their-memberships/200711>\
**Category:** Factual Questions\
**Created:** [September 10, 2003, 7:12am UTC](https://boards.straightdope.com/t/why-do-credit-unions-restrict-their-memberships/200711 "2003-09-10T07:12:27Z")\
**Posts on this page:** 5\
**Page:** 1

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**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\
**Post date:** [September 10, 2003, 7:12am UTC](https://boards.straightdope.com/t/why-do-credit-unions-restrict-their-memberships/200711/1 "2003-09-10T07:12:27Z")

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?

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**Author:** ![Andy](https://avatars.discourse-cdn.com/v4/letter/a/aeb1de/32.png) [@Andy](https://boards.straightdope.com/u/Andy)\
**Post date:** [September 10, 2003, 7:20am UTC](https://boards.straightdope.com/t/why-do-credit-unions-restrict-their-memberships/200711/2 "2003-09-10T07:20:32Z")

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Maybe it’s a credit limit?

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**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\
**Post date:** [September 10, 2003, 7:33am UTC](https://boards.straightdope.com/t/why-do-credit-unions-restrict-their-memberships/200711/3 "2003-09-10T07:33:56Z")

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Maybe _what_ is a credit limit? 😕

Perhaps I should elaborate. I’m talking about the fact that all credit unions that I’m aware of restrict their memberships to certain types of people. Employees of certain companies or in certain fields, members of a church, etc.

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**Author:** ![Desmostylus](https://avatars.discourse-cdn.com/v4/letter/d/c57346/32.png) [@Desmostylus](https://boards.straightdope.com/u/Desmostylus)\
**Post date:** [September 10, 2003, 7:44am UTC](https://boards.straightdope.com/t/why-do-credit-unions-restrict-their-memberships/200711/4 "2003-09-10T07:44:07Z")

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Accident of history, stemming from the legislation initially regulating credit unions, and still operating that way in most cases, even though credit unions have spread all over the world - way beyond the initial jurisdiction.

> [@](#):
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> Many of the first credit unions in New York State were “open” to all. But a later change in the state law limited new credit union formation to only two types. One type was “common bond” credit unions. Their membership had to be limited to a defined group—people for example who work for the same company or attend the same place of worship or who belong to the same social or civic organization. The second type was community credit unions where membership was restricted to people living in a community of less than 10,000 people. “Open” credit unions could no longer be formed.

[http://www.nycreditunions.com/history3.htm](http://www.nycreditunions.com/history3.htm)

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**Author:** ![Tim\_T-Bonham.net](https://avatars.discourse-cdn.com/v4/letter/t/46a35a/32.png) [@Tim\_T-Bonham.net](https://boards.straightdope.com/u/Tim_T-Bonham.net)\
**Post date:** [September 10, 2003, 7:45am UTC](https://boards.straightdope.com/t/why-do-credit-unions-restrict-their-memberships/200711/5 "2003-09-10T07:45:35Z")

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Because they are required to by Federal Law.

That part of the law was pushed real hard by the banking industry, who considered credit unions very unwelcome competition (and still do).

There are frequent disputes, even today, where banks complain that credit unions are being ‘too liberal’ with their membership requirements, and allowing too many people to join.