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Credit union membership: a no-cost employee benefit

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in Employee Benefits Program,Employment Law,Hiring,Human Resources

Issue: Offering membership in a credit union as an employee benefit is now easier than ever.

Benefits: Employees gain access to low-cost financial services. And you have a new, no-cost retention tool to offer hiring managers.

Action: Search the National Credit Union Association's data bank of local credit unions for those that best fit your organization's needs.

The word "free" isn't often associated with employee benefits, but here's one perk that your organization really can offer without incurring any costs: membership in a local credit union. New regulations make it easier to offer this benefit.

Advantages for employees: Access to potentially higher savings interest rates and lower loan rates than banks typically offer.

Credit unions are nonprofit, member-owned and -operated financial cooperatives. Because they're tax-exempt, they typically offer more competitive consumer financial services than other financial institutions.

What's new? Until this year, employers hoping to offer credit union membership to employees needed approval from the National Credit Union Association (NCUA), the governing body regulating credit unions. But new rules this year simplified the process. Many credit unions now actively recruit new employee groups and often welcome even very small employers into their membership.

How to choose a credit union

If you're interested in offering this perk, take these four steps:

1. Start by identifying credit unions that serve your industry or multiple employer groups. Best resource: the NCUA's searchable online database of federally insured credit unions at www.ncua. gov/data/directory/cudir.html. The NCUA site provides information about each credit union's track record, financial resources and past service problems.

2. Call the business development or marketing offices of the credit unions you choose for information about their services. Ideally, you want to align with a credit union that's convenient for employees and offers a wide range of competitively priced financial services. Also, ask for and check references from other employer groups that are already affiliated.

3. Ask how much support the credit union will provide your organization. Will it send a rep to explain the new benefit to your staff? Does it provide posters, brochures and other materials? What's involved in setting up direct deposit for employees? What other coordination efforts will the credit union expect from HR?

4. Be prepared to provide information about your organization (revenue, length of operation, number of employees, etc.) before accepting your employee group.

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