If you have a credit card or a bank card, like me, you’ve gotten the notices that they’re changing any number of terms of the agreement. Especially when the rates change. Now, imagine the terms of a car or house loan changing drastically, and as far as you can tell, you received no notice.
That’s what is alleged to have taken place in Rapid City with what’s cited to be the largest credit union in the state, Black Hills Federal Credit Union, with over 4400 of their loans.
In July 1999, the credit union, after receiving advice from the life insurance company, placed a notice in the monthly credit-union newsletter stating that the premium for the credit disability insurance would increase as of July 1 that year.
and…
Despite the premium increase, the Thurmans’ monthly payment never changed.
Go read the entire story here.
The lawsuit claimed they changed the terms of the loan based on the credit life/disability insurance rates, never correspondingly changed the premium (decreasing the amount paid towards the principal), and “maybe – kind of – sort of” loosely provided notice to the people obtaining the loans? The insurer providing the coverage, and also a party to the lawsuit, CUNA Mutual Insurance Society, is a creature of the Credit Union National Association (CUNA), a trade association that advocates on behalf of credit unions across the U.S.
What could go wrong?
As you might have thought, it took a while but – a couple of setbacks in court later – it didn’t really appear the courts weren’t looking favorably at the Black Hills Federal Credit Union about all of this. So they settled, noting..
“Black Hills Federal Credit Union denies any wrongdoing; however, the parties agreed to settle because of the uncertainty, expense, and inconvenience associated with continued litigation.”
“We believe the settlement is in the best interest of BHFCU and our members.”
It is hard to see how they were acting in the ‘best interest’ of their members when they changed the terms of the loan agreement with little or no notice. I’m not sure how much comfort that members can take in Black Hills Federal Credit Unions’ assertion that “Credit Unions are not-for-profit cooperatives working to improve lives,” as they claim on their website. Because it doesn’t sound like they were doing much for their members as described in the lawsuit.
Congress gave credit unions a 100% exemption from payment of any federal income taxes or state income taxes because they were supposed to provide lower income families a place to borrow money. In fact, credit unions have pushed for their own removal from the Consumers Financial Protection Bureau’s oversight.
But when things like this happen… it’s worth noting that maybe they should be subject to the same playing field that banks are required to play on.
Credit unions, Fannie Mae, S & L’s and the Farm Credit System are all poster children for how populist-inspired government intervention into free markets eventually turn into bloated zombies that only exist for the benefit of their interest groups.
Credit union “consultants” make billions every year selling support and systems to supposedly local credit unions, all protected by the CUNA lobbying army. Farm Credit cherry-picks the best, not worst, operators who then manage FCS to maximize the value of their stock, just like any other country club.
You would think we all should have learned something from the farm crisis, the S&L crisis, the mortgage crisis, et al, but, the only thing we seem to learn is that entrenched pork is the finest dish Washington has to offer.
Ditto
Please also tell us about all the virtues of the private banking system and their perfect record!
Let us resurrect the payday loan industry and let the market dictate how much interest and fees can be charged.
Bankers love to hate credit unions and fcs because they don’t get to concentrate the profits in their own pockets. I get a dividend payment every year as a stakeholder in where I borrow as opposed to my regular bank where I get zip which I myself pay taxes on BTW!
I know people who bank through credit unions that are there because other private banks turned them away and fc is the exact opposite as what was stated above. These institutions exist to help higher risk individuals/industries as well as the well to do which obviously is good business. You want to talk about pork and big money in politics of private banks vs this group? I don’t think that’s a graph you are going to want to look at! If that’s what wins the day in Washington these institutions would have never existed and we would all be owned by Mr. Potter!
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I’m going to leave this here: https://finance.yahoo.com/news/every-wells-fargo-consumer-scandal-since-2015-timeline-194946222.html
Yup, Credit Unions are the problem in the finance industry. . .and the Republican blog’s suggestion is to increase taxes and let the government decide how to spend the money. . .What kind of alternate universe is this??
But don’t worry folks, you can still trust free market capitalism! Consumers are smart enough to understand and decide which type of financial institution has their best interests in mind.
My guess here is the ol’ bankers’ lobby make considerable financial contributions to this site. . .they seem to have found their way to the top of the advertisements on the right. . .