The common wisdom has been that credit unions - as opposed to banks - are low profit deposit and lending institutions that exist to serve their special population of “members.”  Do you belong to a credit union? Do you notice how they call you a “member” or a “shareholder?” I’m guessing that the reason that those terms seem weird is that because your credit union is treating you like anything but!


True story: I went to the courthouse very recently to file a consumer protection case against a credit union (not my first, and by the trend of things, certainly not my last). The facts involve repossession of a car that was financed by the credit union and the allegations are numerous, illegal collection, wrongful repossession, violation of multiple California laws regarding vehicle financing and repossession and outright civil theft of my client’s car! As I’m turning into the courthouse parking lot, and on the left is guess what? A branch of the credit union that I’m suing! I went in to the courthouse and went to the clerk’s office. Along the way, I mentioned this weird coincidence in conversation with someone in the courthouse who said “oh yeah, I’m a member of that credit union and the service has gotten terrible!”


That was enough for me, I had to go see what was going on. What kind of corporate culture spawns these kinds of complaints? The building looked huge from the outside and there was ample parking. I passed through the weapons detection porthole to find a Keurig coffee machine and a table with marketing material and speakers that were playing groovy music. The interior space was tiny. There were about 3 empty cubicles, two interior ATM’s, two chairs, and a counter right in the middle. A counter kind of like the information counter in an airport. And standing behind that counter was this credit union’s lone human employee. That was it. Nobody else. It was lunchtime and there was a line, so I checked out the premises and left.


CUNA Mutual Group is actually a life insurance company that markets services and systems to credit unions. According to their most recent Credit Union Trends Report, business is booming. New “members” are being acquired, assets are rising, loan volumes are up, and presumably the value of these businesses are growing as well. So why is customer service such a low priority? Why is legal compliance such a challenge for these folks, and why haven’t they learned some of the most basic consumer protection lessons that have already been learned (the hard way) by the national banks?!


One wonders. Credit unions can be a great place to bank. They can offer lower rates, better products, and sometimes, superior service. I even recommend credit unions to readers of my book “The Secret World of Debt Collection.” But what seems to be happening, is that growth may be putting pressure on systems and people and culture and the ugly side effect is violation of debt collection, credit reporting, and consumer protection laws.


Remember, if something weird is happening to you - particularly involving your credit union - get it checked out by requesting a free consumer protection case evaluation. It doesn’t cost you anything to get peace of mind. Hopefully, credit unions will get the message, clean up their act, and focus on customers first!

Michael F. Cardoza, Esq.
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U.S. Marine & Consumer Financial Protection Attorney helping victims of ID theft and Credit Reporting errors.
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