Legal Question in Credit and Debt Law in Minnesota

Unauthorized transfer of money between accounts

I have several accounts at a Credit Union, including a loan. Recently I fell behind in payments to the loan (my fault, I realize that). On April 4, the credit union transfered money from both my checking and savings accounts to the loan account to cover the amount I was behind, without my authorization and without notifying me. Luckily I noticed the transactions because I logged onto their online service, otherwise we could have easily bounced some checks. The only official notification I received arrived in the mail 2 days later.

Questions:

1) Can they legally do that?

2) Do I have any legal recourse?

Thanks!!


Asked on 4/09/99, 7:32 pm

1 Answer from Attorneys
Stuart Williams

Re: Unauthorized transfer between accounts

Without looking up any law or even looking at your

particular agreement with the Credit Union, it has

long been my understanding that credit unions usually

do this, it is in their agreements, and it is even

part of why they can give lower rates (or used to, anyway)

than regular banks.

But your agreement might NOT allow it; you should either

check carefully for useful and / or have an attorney read

the documents and render you an opinion. Don't just rely on

my comments above!

Stuart Williams

Law Offices of Stuart J. Williams

21 Walter St.


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Answered on 4/10/99, 1:16 am


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