Organization of Retirees Forms Own Credit Union

The American Assn. of Retired Persons has formed its own credit union, hoping that its leverage will force traditional financial institutions to open their eyes to an enormous consumer group.

President John Denning became the first customer of the AARP Federal Credit Union on Tuesday, the first day of a three-day biennial convention expected to attract 30,000 senior citizens to speeches, workshops, exhibits and entertainment.

By year-end, “we expect to have thousands of members,” said Cyril Brickfield, chairman of the nine-member credit union board. The 30-year-old AARP has a general membership of 28 million.

“We hope to awaken the industry to the wisdom of offering credit to the elderly at lower terms,” Brickfield said. “I think, little by little, you’ll see competition.”

Nader Comments

The credit union is open to all AARP members and their spouses. It offers savings accounts, certificates of deposit and credit cards, at $10 a year and 19.9% interest with a 25-day interest-free grace period each month.

Members were also told to use their numbers in getting better deals from the insurance industry.

“You could become the most important consumer organization in America,” Herb Denenberg, a former Pennsylvania insurance commissioner, told one session.

Conventioneers also heard Ralph Nader attack consumer frauds. “If a company can’t sell you its product solely on its merit, then it gets a celebrity to sidestep the issue. Stay away from it,” he said.