KENNEDY V.A. EMPLOYEES FEDERAL CREDIT

UNION PRIVACY POLICY
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GOAL:  To protect member's personal information while making available financial 
               products and services that meet their needs and enable them to 
               reach their financial goals.  


OBJECTIVES:  

           
1.  To ensure member's personal information stored in files and on  

                 computer is protected by strong security controls.

            2.  To protect member confidentiality by restricting personal infor-

                 mation to those employees that need to know that information.

            3.  To only share information when necessary to administer the 

                 products and services we provide, when required to do so by

                 law or government, or when we partner with others to offer a 

                 broader array of products and services.


COMPLIANCE:  The Credit Union will comply with the privacy rules as required
                              under the Financial Services Modernization Act.


RESPONSIBILITY:  Internal responsibility for compliance shall rest with the
                                    Manager and Assistant Manager of the credit union.  

DISCLOSURE
 
KVAEFCU'S PRIVACY NOTICE WILL BE CONSPICUOUSLY POSTED
IN THE CREDIT UNION OFFICE BEGINNING 03-31-2001.

INITIAL DISCLOSURE: 
                Primary members will receive a privacy disclosure in their March 31,
                2001 statement, joint owners will not receive a separate notice.

SUBSEQUENT DISCLOSURE
                Effective March 31, 2001, any new member to the Credit Union will
                receive a privacy disclosure.  Effective March 31, 2001, any non-member
                being added to an account, cosigning on a KVAEFCU loan, or
                KVAEFCU Mastercard account will be given a disclosure at the time the
                transaction is completed, no annual privacy notice will be sent. 

ANNUAL DISCLOSURE
                Primary members will receive a current privacy notice every twelve (12)
                months beginning in 2002, joint owners will not receive a separate notice.

FORMER MEMBERS
                KVAEFCU will not disclose nonpublic information or send annual privacy
                notices to former members.  

 PROMOTIONAL MATERIALS, NEWSLETTER ETC
                KVAEFCU will obtain written permission before using any photograph,
                likeness, or name that may disclose the fact that a person is a credit union
                member.

"EMPLOYEES MUST MAINTAIN THE CONFIDENTIALITY OF ALL MEMBERS INFORMATION EXCEPT AS REQUIRED TO DO THEIR JOBS, OR AS REQUIRED BY LAW."    

 DIVULGING MEMBER'S PRIVATE INFORMATION MAY RESULT IN DISCIPLINE UP TO AND INCLUDING TERMINATION OF EMPLOYMENT.

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INTERNAL PROCEDURES


A.  NEW MEMBERS
1.  When an eligible person applies for membership in the Credit 
      Union, it is the employee's responsibility to fully explain KVAEFCU's
      privacy policy.
2.  Emphasis shall be placed on the fact that security controls are in 
     effect for the protection of members and are not intended to cause 
     inconvenience to anyone.

     MEMBER INFO:
1.  In light of the new privacy rules and regulations, members may ask to 
     review their Credit Union file.  It shall be KVAEFCU's policy to allow the 
     member to see any and all information, example; membership card,
     loan file, MasterCard file etc.

        1.  Member must request in writing and schedule a time with
             KVAEFCU management to come into our office for the review.
        2.  Member must tell us, at the time the appointment  is scheduled,
             what he/she wishes to review.
        3.  Information requested will be pulled and the member allowed to
             review the information in the presence of KVAEFCU management
             The member will not be allowed to copy certain documents, such
             as credit reports, or to remove information or documents from the
             Credit Union office, for this reason, KVAEFCU management will 
             remain with the member at all times.

B.  TELEPHONE TRANSACTIONS:
      1.  Account information and transactions, such as transfers and 
            check withdrawals, may be handled by telephone if the identify 
            and the authority of the person requesting the information or
            transaction can be verified.   

C.  MAIL:
         1.  Check withdrawals or other personal information will be
               mailed to the address on the computer unless otherwise
               approved by manager or assistant manager.
          2.  Address changes must be in writing, signed by the member,
               fax is acceptable.
          3.  No information will be given to mortgage companies etc., 
               without a signed authorization from the member.

D.  CREDIT INFORMATION:  
           1.  KVAEFCU will report members" loan information and 
                derogatory information, such as negative accounts, to the
                major credit bureaus.
           2.  KVAEFCU will give loan payoffs and reciprocal credit 
                information to other lending or collection agencies for the
                purpose of skiptracing etc, if the identity of the agency can
                be verified to our satisfaction.

E.  MERCHANT CHECK VERIFICATION:

            1.  KVAEFCU will answer merchant check verifications with
                 the following information:
                 * Member Name
                 * Micro number or Social Security Number
                 * Amount of check
                 * Check number series
                 * If the merchant is seeking only verification that the 
                    account is open, the request must be made in
                    writing signed by the member.

F.  PRE-TEXT CALLING:
              1.  KVAEFCU will not engage in any pre-text calling to obtain         
                   information about missing members.  Example, skip- tracing --
                   --even if an outside agency is employed.

              2. Any  outside agency employed or partnered with KVAEFCU will be
                  required to have, as part of their contract, a statement stating they will
                  not use or attempt to use pre-text calling.

G.  SECURITY OF DATA PROCESSING SYSTEM:
             1. Access to member information stored in files and on computer 
                 will be on a "need to know basis."

             2. Internal security levels are set for each job description and will 
                 allow employees to see and perform only functions needed.  
  
         

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