Cana credit unionreopena closedaccount without authorization and apply funds to an old debt?

Get Legal Help Today

 Secured with SHA-256 Encryption

Cana credit unionreopena closedaccount without authorization and apply funds to an old debt?

10 years ago, I took out a loan from a credit union and failed to pay the entire balance off. As a result, my credit scored dropped tremendously as the credit union reported nonpayment for 7 years until the account eventually fell off my credit report and was closed by the credit union (needless to say, I have no accounts opened with this credit union). Earlier this year, I loaned a family member who banks with the same credit union $500. She reimbursed me by check, so I went to the credit union to find out if their were sufficient funds in her account. The teller asked me for my ID and took the check to verify funds. When she came back, she told me they were keeping the check, reopening the closed account, and applying the funds to the old balance. I never signed/endorsed the back of the check and when I asked for the check back, I was told they would not surrender the check to me and would draft the funds from my family member’s account immediately and apply to the unpaid balance. Is this legal? Can they reopen the account without my authorization? My family member tried to dispute the legality of having the money come out of her account without the actual person (me) she wrote the check to endorsing it. She asked for proof that I had cashed the check of which they could not furnish, but have not put the money back into her account.

Asked on August 23, 2010 under Bankruptcy Law, Louisiana

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Credit Unions are not the same as banks.  They are financial institutions owned by members who usually have something in common (City workers, etc.) and they are operated and managed by mostly volunteers on a Board of Directors.  But they are not unsupervised.  The National Credit Union Administration (NCUA) is a federal agency that has the power to form and supervise credit unions.  Credit unions, just like anyone or anything public or private, can not violate the law in the transaction of its business.  What happened here appears to have by-passed the law not only as against you but as against your family member.  I would contact NCUA for help here as soon as you can.  Good luck.

http://www.ncua.gov/Contact.aspx


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption