KOL KOREI: Rabbonim Prohibit Borrowing from Credit Unions


In a recent p’sak, rabbonim have issued a kol korei prohibiting partaking in and borrowing from credit unions, including but not limited to institutions such as Penfed and First Atlantic.

Credit unions are cooperatives that are member-owned. As that is the case, the monies being lent by a credit union are actually being lent by its members. Thus, a Jew taking a loan from a credit union is actually borrowing from its Jewish members with interest, which constitutes the issur chomur of ribbis.

This p’sak is not new. As stated in the kol korei, this p’sak was already issued by Rav Moshe Feinstein zt”l. With the emergence of credit unions as a popular loan source, it has become necessary for this issue to be revisited.

Although many people are used to the idea that minor shareholdership in public companies, where ownership is limited to voting rights, is not problematic, that is not the case in regard to credit unions. That hetter, as explained in Igros Moshe (Even Ha’ezer 1:7), is based on the fact that such companies are structured in a fashion in which a minor shareholder does not function as a partner owner, nor is the stock bought with such intent. Conversely, in a credit union, each member has an equal vote irrespective of how minor his investment may be. Additionally, the credit union is meant to be member-controlled.

Many have pointed out that there were similar loaning societies in Europe in the 1800s which various Acharonim were matir. However, talmidei chachomim researching this issue have concluded that many of those heteirim do not apply to the current-day credit unions. Additionally, those heteirim were issued because of what was considered a sha’as hadchak (extenuating circumstances) and to be melamed zechus on those who were lenient.

This prohibition includes being a member as well as borrowing with and repaying interest. (The status of a member with no funds deposited may be a gray area, as it seems that a member in such a position cannot vote. More research may be needed on this point from both halachic and legal perspectives.)

Additionally, efforts need to be made to encourage credit unions to have hetter iskas, as well as to explore other possible solutions, such as selling existing loans to non-Jews, which must be researched for halachic viability.

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  1. Even worse then credit unions are whats called P2P these companies offer very low interest rates. These companies take your application for a loan and check you out but the loan is given by a third party who is making money on the loan. This third party could a yid. My rov told me to stay away.

  2. This is all relevant to credit unions with members from Jewish areas. There are many areas of the country where this chance of a Jew being a member of a credit union is almost non-existent.

  3. To Berel, the ones who are giving you the loan are investors. Hundreds or thousands of people invest in these companies many of them could be jewish. I’m not so sure it’s a miut. Besides I don’t think miut makes any difference here. (Its also a problem being an investor)

  4. No true. In order to borrow money you have to put money in, hence if a Jew ever borrowed from this credit union he is also lending money. Being that Jews are 1% of the world. If 100 people borrowed you can assume one Jew borrowed and it would be a problem.


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