All credit union loans and other products are forbidden- kol koreh

[ExGingi]

is this a good deal?
https://www.fafcu.com/2018holidaycd/

I notice that on the fafcu.com website they say that their deposit account are interest bearing. In contrast, Elements Financial where I have an HSA clearly says dividends (and the monthly statement shows dividends earned). Was there any distinction made by Rabbonim ruling on this between earnings that are said to be interest, vs earnings that are said to be dividends?

For example, here's an excerpt from a rate page of another CU. Notice the asterisk disclosure about the dividend.

[yitzf]

I notice that on the fafcu.com website they say that their deposit account are interest bearing. In contrast, Elements Financial where I have an HSA clearly says dividends (and the monthly statement shows dividends earned). Was there any distinction made by Rabbonim ruling on this between earnings that are said to be interest, vs earnings that are said to be dividends?

For example, here's an excerpt from a rate page of another CU. Notice the asterisk disclosure about the dividend.

I'm pretty sure that FAFCU pays dividends, and only if you have $100+ in deposits.
I don't think there is any interest.

[ExGingi]

Rather informative comment on TLS: http://www.thelakewoodscoop.com/news/2018/12/kol-koreh-issued-regarding-credit-union-lending.html#comment-753766

Did any Rabbonim comment or respond to the facts being raised here?

First of all, 150 years ago the Shu”t Shoel U’Meishiv was mattir mutual savings and loan societies (which have more problems than modern day credit unions) that have majority non-jewish membership for reasons that would still apply. It is my understanding that many Poskim in both Europe and America 50+ years ago relied on this psak l’chatchilah, though there were many (perhaps even a majority) who still prohibited it.

Second, I believe that someone provided the Rabbonim who signed with the “naive” or simple definition of a credit union that one would find on Wikipedia or Investopedia. This naive explanation is similar to that of a mutual savings and loan society and is correct for some types of credit unions in some states and countries.

However in legal terms, all Federal Credit Unions in the US (any credit union with Federal in it’s legal name including both First Atlantic and Penfed) are governed by the rules in US Code (Title 12 Ch 14) which clearly states that they are actually legally organized as corporations and not as a cooperative, and the borrowers and lenders are shareholders in the corporation, not simply members of a cooperative lending society. There are some special rules that apply to credit unions that do not apply to for profit banks but the core legal structure of Federal credit unions is not changed by these regulations.

As such there is a good chance that Rav Moshe’s heter for corporations would apply.

[yelped]

Rather informative comment on TLS: http://www.thelakewoodscoop.com/news/2018/12/kol-koreh-issued-regarding-credit-union-lending.html#comment-753766

Did any Rabbonim comment or respond to the facts being raised here?

I was going to post that comment here, too, now. I am also curious.

[aro123]

I was going to post that comment here, too, now. I am also curious.

yes they know. according to the best of my knowledge and understanding,  they feel a membership  in a credit union is a real ownership vs a stock in a public bank is just a forum to invest in the bank and not a real ownership

[yelped]

yes they know. according to the best of my knowledge and understanding,  they feel a membership  in a credit union is a real ownership vs a stock in a public bank is just a forum to invest in the bank and not a real ownership

Details? Can someone post where this Shoial UMaishiv is? I would like to see what he says.

[ExGingi]

Here's another question:

Elements financial offers a secured CC with an interest rate locked at 2% above the deposit rate securing such card.

If someone were to deposit funds into an Elements savings account (or CD) and borrow the exact amount deposited on the CC, then all he's doing is paying Elements a 2% fee for building up his credit. Would that be a problem even for those that hold that in general CU deposits are a problem?

[Zalmy]

Banks voting power, and thereby halachic ownership is dependent on how much stock you own. Board members are paid, and don't have to be depository. Poskim differ if ownership or decision making authority define halachic ownership.

Credit union is one member one vote, regardless of how much each member has on deposit.

This isn’t actually true, though. They probably were like that once upon a time.

[aygart]

Here's another question:

Elements financial offers a secured CC with an interest rate locked at 2% above the deposit rate securing such card.

If someone were to deposit funds into an Elements savings account (or CD) and borrow the exact amount deposited on the CC, then all he's doing is paying Elements a 2% fee for building up his credit. Would that be a problem even for those that hold that in general CU deposits are a problem?

my understanding is that membership itself is a concern.

[aro123]

Here's another question:

Elements financial offers a secured CC with an interest rate locked at 2% above the deposit rate securing such card.

If someone were to deposit funds into an Elements savings account (or CD) and borrow the exact amount deposited on the CC, then all he's doing is paying Elements a 2% fee for building up his credit. Would that be a problem even for those that hold that in general CU deposits are a problem?

being a member is a problem even without any interest to/from you

[yesitsme]

Could someone please give me 20K so I can get out of this mess.

[ExGingi]

being a member is a problem even without any interest to/from you

Why? How is this worse than a bank?

With a bank, I lend money to the bank, have no say, and they lend out my money along with other money.

With a CU, I invest my money in the CU, and they lend it out. But what if I am the one borrowing back all the money that I invested? How is my membership an issue? Why is it any more of an issue than stock ownership in a bank?

[aygart]

Why? How is this worse than a bank?

With a bank, I lend money to the bank, have no say, and they lend out my money along with other money.

With a CU, I invest my money in the CU, and they lend it out. But what if I am the one borrowing back all the money that I invested? How is my membership an issue? Why is it any more of an issue than stock ownership in a bank?

Whatever the difference if you are a member then it is being paid to you according to the reasoning behind this.

[yr]

https://www.yutorah.org/lectures/lecture.cfm/916750/rabbi-aryeh-lebowitz/ten-minute-halacha-credit-unions/

[yeshivaman]

https://www.shivtiyk.com/store/index.php?route=product/product&product_id=258&search=credit&description=true

https://www.shivtiyk.com/store/index.php?route=product/product&product_id=259&search=credit&description=true