The National Association of Realtors has submitted its application for a Web-based credit union that could deliver a range of financial services to members, including mortgage, auto and business start-up loans, Realtor-branded debit cards, personal and business checking and savings accounts, and money market accounts, among other offerings.

This proposed credit union, which has a working title as the Realtors Federal Credit Union, would be open to the estimated 1.2 million members of the association, Realtor-affiliated staff members and their families.

NAR directors approved the creation of a credit union in November, with a total of $15 million reserved for the effort.

That effort, and other ventures such as a technology incubator company established by NAR, is supported by a $16 annual membership dues increase for members that became effective this year. NAR announced plans to raise $60 million to $100 million in the next three to five years to pay for several new ventures, including the credit union.

While the banking and credit union industries are at odds on some issues — such as credit unions’ exemption from federal income tax — and NAR has battled to block federally chartered financial services organizations from offering real estate brokerage services, it remains to be seen whether formal opposition will emerge to NAR’s credit union proposal.

Keith Leggett, senior economist for the American Bankers Association, a group that represents the banking industry, said the NAR proposal for a credit union appears to be a straightforward and legitimate effort to offer "plain vanilla financial services," and the ABA typically would not comment on such an application.

"From our standpoint, we think that banks would be better equipped to meet the financial needs of Realtors and therefore we kind of question whether or not this Realtors Federal Credit Union can actually meet those needs," he said.

Also, Leggett said that credit unions are considered to have a mission of serving people "of modest means," and it is hoped that the Realtors credit union is not just serving "the wealthy Realtors who are doing well, but also reaches out to those who are struggling and provides services that are geared toward those individuals who are not doing well."

The agency has 30 days to make an initial response to applicants, though this response will not necessarily be in the form of approval or disapproval. "Often NCUA has questions or requires additional information from the applicants."

There are already other examples of local and regional Realtor-affiliated credit unions, including credit unions for the Long Island Realtors Federal Credit Union, which serves Long Island Board of Realtors members, staff and families; and the Capital Area Realtors Federal Credit Union, which serves Greater Capital Area Association of Realtors members, staff and families, among others.

Marian Fraker-Gutin, director of the Long Island credit union, based in West Babylon, N.Y., said she believes the NAR effort will not impact members of the local credit union. "I don’t think we’re going to lose anybody," she said, adding that it will serve as an option for those seeking online credit union services.

While NAR’s proposed credit union is entirely Web-based, the Long Island credit union has four office locations and offers in-person service, she said.

Car loans are among the Long Island credit union’s most popular products, Fraker-Gutin said. "Realtors really need their cars and we look at their income differently" than other financial entities might, she said. "We look at them as Realtors."

The Long Island credit union also offers home-equity loans up to $50,000, and had offered mortgage loans but has reached its maximum cap for those. The credit union has about 1,677 members and assets of $7 million. The Long Island Board of Realtors trade group has an estimated 23,000 members.

The Capital Area Realtors Federal Credit Union, based in Rockville, Md., has 1,148 members and $9 million in assets. And the Greater Capital Area Association of Realtors, which the credit union serves, has about 11,000 members.

Salvant said NAR anticipates that the interview process will begin for credit union managers in April.

***

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