August 12, 2008

Debra Droppleman, CFO

Fairmont Federal Credit Union

402 Tenth Street

Fairmont, WV 26654

Re: Suspension of Service Policy.

Dear Ms. Droppleman:

You asked if a federal credit union (FCU) can apply a suspension of
services policy it has, regarding a member who causes a loss to the
credit union, to members in other circumstances. Subject to our comments
below, we have no legal objection to your proposed policy.

Generally, FCU\'s can suspend services to a member if it complies with
the Federal Credit Union Act (FCU Act). The FCU Act grants all members
two basic rights: the right to maintain a share account and the right to
vote at annual meetings. 12 U.S.C. 1759, 1769. However, nothing in the
FCU Act or National Credit Union Administration\'s (NCUA) rules and
regulations precludes an FCU from restricting the availability of
certain services, provided there is a rational basis. A rational basis
exists when there is a relationship between the risk to a credit union
and the restriction of services.

Your proposal would extend your current suspension of services policy to
members who are abusive to credit union staff and members or who present
a risk of loss to the credit union. In a past opinion letter we
addressed suspension of service policies as applied to an abusive
member. That letter provides that an FCU may establish a policy that
denies an abusive member access to FCU premises or to services that
involve personal contact with FCU employees. OGC Op. 91-0119 (February
20, 1991).

Although previous opinion letters addressed your proposal regarding
abusive members, you correctly noted that we have not addressed whether
an FCU can extend a suspension of services policy to a member who
presents a risk of potential loss to an FCU. We have no legal objection
to an FCU suspending services to these members as long as there is a
rational relationship between the risk to the credit union and the
restriction imposed on the member, and an FCU complies with FCU Act.

We caution, however, that any suspension of services policy should be in
writing and an FCU should make its membership aware of the policy before
it is enforced against any individual.

Debra Droppleman

Page 2

Finally, we note that contract provisions and federal and state laws may
limit an FCUs ability to deny certain services to members. Specifically,
we caution you that the Equal Credit Opportunity Act (\"ECOA\") may have
an impact on your proposed policy. ECOA

and its implementing regulation, Regulation B, 12 C.F.R. Part 202, are
intended, in part, to promote the availability of credit to all
creditworthy applicants, regardless of race, color, religion, national
origin, sex, marital status or age. The proposed program does not
appear, on its face, to violate ECOA or Regulation B. However, policies
that are facially neutral may be prohibited under the \"effects test.\"
Under the \"effects test,\" a policy is discriminatory if it has a
negative impact on a protected class of persons, even if there is no
intent to discriminate. We suggest that you consult counsel to determine
the applicability of ECOA and whether the policy would have a
discriminatory effect if implemented.

Please feel free to contact Staff Attorney Justin Anderson or me with
any additional questions.

Sincerely,

Sheila A. Albin

Associate General Counsel

08-0431

GC/JMA:bhs