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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."

NAR’s proposal probably won’t be viewed by the banking industry as an alignment between the Realtor group and the credit union industry at large, he said.

Even if the application process is successful, there is no guarantee that the credit union itself will be a success, Leggett noted.

Lucien Salvant, a spokesman for the National Association of Realtors, said that while "banks and NAR don’t see a lot of things eye to eye," and banks and credit unions have had their own clashes, "We’re proceeding on this not to attack banks but to provide benefits for our members."

He added, "Take into consideration that most of our members are independent contractors. They work on commission," and because of this their cash flow can be irregular compared to salaried positions.

Commission-advance loans are among the services that the proposed credit union would provide.

Representatives for the Mortgage Bankers Association could not be reached for comment about the NAR credit union application.

NAR filed the application for the credit union on March 10 in Washington, D.C. The trade group is eying office space for the credit union and will also hire a management team to operate the credit union, Salvant said.

Salvant added that the group anticipates that the credit union will receive approval before the end of the year.

Employees of Realtor-owned businesses and Realtor customers, including home buyers and sellers, would not be eligible for services offered by the Realtor credit union.

The National Credit Union Administration, an independent agency that charters and supervises federal credit unions, has begun its review process of the NAR application "and will respond as expeditiously as possible," according to a spokesman for that agency.

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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