A story in today’s Wall Street Journal examined efforts by Pentagon Federal Credit Union to grow significantly and in the process “test regulatory limits,” as the headline put it. The CEO of PenFed — the nation’s third-largest credit union, with more than $23 billion in assets — describes a “no speed limit” philosophy and a goal of growing to $75 billion in assets by 2025, “pressing up against regulatory boundaries,” the reporter wrote.
For example, despite a compliance officer’s concerns about “operational risk,” PenFed had five pending mergers in January 2017, prompting the National Credit Union Administration to “privately warn PenFed off new deals,” according to the Journal. PenFed pursued this growth with an advertising tagline called “Great Rates for Everyone.” PenFed allows anyone outside its military fields of membership to join by paying a one-time $17 fee to a nonprofit organization.
The article also quotes a chief executive at a smaller credit union expressing concern that an “anything goes” approach to credit union membership risks the industry’s reputation.