Can a Credit Union change the terms of a 5 year certificate of deposit before the maturity date?
Question Details:
A credit union issued me 9, 5 year CD's 6 weeks ago. The APY was 2.768. After the 5th of this month they claimed a mistake was made and they want me to sign papers changing the yield to 2.30 APY. I objected, so they then upped the rate to 2.55. Do I have the right to demand that they live up to the original agreement?
This depends on the interest rate terms of the original agreement. If they were linked to particular indexes, or otherwise variable, the credit union may be able to change amounts payable. Similarly, some CD agreements allow unilateral changes. Most, however, require your consent to be changed, and you are normally not required to do so.
To get results might require you to complain to the company, to complain to their regulator, or to use a lawyer to send them notes and/or to litigate on your behalf. The amount in the CD might determine whether or not you want to front the costs for lawyer letters or litigation. If you did litigate, the Consumer Fraud and Deceptive Business Practices Act might give you lawyer fees and court costs, as well as recovery of whatever interest they owed you.
You could also possibly gain more if the credit union has done the same thing to multiple others in the group that has their funds in the credit union. In that case, a class action against the credit union might be possible.
Hope this helps,
Bill Price
William A. Price
Attorney at Law
wprice@growthlaw.com
