Kol Koreh issued regarding credit union lending

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  1. The way a Credit Union works is that everyone who opens an account or borrows money from the CU becomes a member and gets 1 share of ownership. So everyone is an equal owner. Therefore as an owner you are L’hedia Lending money to other Jewish people with ribbis.

  2. As it says on the bottom line of the letter ask your Rov if you have a loan or are taking out a loan…as a aside I’m not sure LakewoodScoop is the correct forum for this…

  3. 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.

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