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DINOSAUR JOCKEY

Please Help! Credit Union Moving Payments to unsecured loan, threatening Car Repo!

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Posted (edited)

Hi All,

 

Hoping for some help, as this doesn't smell right.   Changing some of the financial details, but the state info/general info is correct.  Trying to summarize to keep it short and readable

 

  • Have a car loan, and visa card with a credit union based in CT.  I live in NY.  Been a member for 5+ years
  • Received first class letter on 6/6/2019, advising if I don't pay outstanding balance ($850) by 6/10, in person, with a certified check, my vehicle will be repo'd.  They also sent notice via regular email, not via their encrypted/secure email portal.   Didn't see it, didn't open it.
    • From what I can find, CT law requires 10 days notice IF they are going to send notice.  And the notice must be sent via certified/registered mail.  
      • Does first class/email count?
    • I think the Past Due Balance was incorrect, but this is the problem I'm having:
      • Notice says I have to pay ~$800 by Monday
        • This includes April and Mays payments, plus interest, late fees
      • May 12th, I paid $500 on my car loan.   This would have covered Aprils payment, late fee, plus extra
        • May 29th, someone at the credit union took the $500 car loan payment and removed it, then applied it to my credit card balance, so it appeared as if I never paid April.
          • On May 29th, my Via Card was 1 month behind.  My monthly payment is roughly $70.   So the $500 payment they moved, roughly $100 went to the credit card amount due + late fee, the other $400 went to principal.
        • June 3rd, I paid an additional $500 to car loan, to cover May's payment + late + interest. 
        • Had the credit union left the May 12th payment alone, I would now be more than current and only owe the 6/21 car loan payment

 

I understand Credit Unions operate differently than banks, and have a different set of regulations.  However, logically, it doesn't make sense to me that they can completely remove/apply a payment from a past due secured loan (auto loan) to an unsecured loan (credit card) at will....*IF* they can, I can see doing so to make a loan current but not to pay down principal while making another loan past due.

 

Am I correct here?  Any advice?

 

I've been contacting them/the collections manager.  However, I get the feeling she hates me and some of this is due to an interaction in 2018.   In 2018 she first contacted me, and was extremely rude/unprofessional and I called her out on it.  She disclosed why the previous collections manager was fired, referred to "people like me" (deadbeats), made comments about why I'm not married alluding to me not paying my bills, etc.  Was just very very unpleasant and not what I expected from a credit union.  (I have these conversations recorded, but haven't disclosed any of that.  I'm pretty sure NY is a 1 party state, but CT is a 2 party state and I'm not an attorney, didn't want to potentially tell someone I broke wiretapping laws)

 

Please help, Monday is coming up fast!!

 

Thank you!

 

 

 

Edited by DINOSAUR JOCKEY

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is there equity in the car? then the CU wants it to cover the credit card. this is SOP for most CUs.

 

what CU is this?

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Approximately 5k worth of equity in the car.  Credit limit on my card is only 3k, I never asked for an increase after the initial approval.   Balance is approximately 2k.

 

https://www.mygecreditunion.com

 

i could see them potentially pulling equity or whatever but how can they make my car loan appear late, and force a repo....to pay down the unsecured credit?   That just doesn’t make sense to me 

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Posted (edited)
7 hours ago, DINOSAUR JOCKEY said:

Approximately 5k worth of equity in the car.  Credit limit on my card is only 3k, I never asked for an increase after the initial approval.   Balance is approximately 2k.

 

https://www.mygecreditunion.com

 

i could see them potentially pulling equity or whatever but how can they make my car loan appear late, and force a repo....to pay down the unsecured credit?   That just doesn’t make sense to me 

It's common for CU loan/account/membership agreements to include cross-collateralization language, which means that your car is pledged as security for any debts you have with the CU.  Read your agreements.

 

This doesn't make sense to you because you've been told over and over that CUs aren't like money-hungry banks who have to please greedy shareholders, with a CU you are a member and not just a customer, blahblahblah.   [stepping down off of soapbox now] 

 

The priority matter is pulling together whatever money you can today, and then negotiating something with the CU that allows you to keep your vehicle past tomorrow.  

 

 

Edited by cv91915

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Credit unions make liberal use of the fact they can offset funds virtually unchecked.  

 

From what I gather, after making your car payment and bringing that up-to-date, your credit card payment was overdue.  From a financial perspective, it makes sense that the credit union would want to shift the default to a secured account to an unsecured account.  Is it legal, I strongly suspect that it is.  Now, you can try to fight them legally, but I suspect that while that plays out you will be doing a lot of walking.   

 

IMO, the first thing you want to do is clear your default on both accounts.  This gives you breathing room to contact both an attorney and their banking regulator to see they get FITA.  

 

I suppose you could try and talk with them to see if they can't adjust the payments to bring you up to date on both obligations and give you some breathing room.  Generally collections people at credit unions are shite ... much more so than at banks ... as you have already found out.  You could try and escalating the case to the credit union executive offices.

 

But prepare for the worst.  I'd make the car un-repo-able and make sure you have no direct deposits going into your CU account.  They definitely will offset from your deposit accounts.  And until you bring both accounts current, you should expect further problems.  Make no mistake about it, I made no mistake whatsoever when I previously said collections people at CUs are shite.

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It might be legal,  but I wouldn't say ethical.

If there are people in the back office of Joe Schmoe Credit Union looking at customers' payments and deciding to credit a customer's car payment to their credit card, so they can repossess the car tomorrow, that doesn't seem right.

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9 hours ago, PotO said:

 I suppose you could try and talk with them to see if they can't adjust the payments to bring you up to date on both obligations and give you some breathing room.  Generally collections people at credit unions are shite ... much more so than at banks ... as you have already found out.  You could try and escalating the case to the credit union executive offices.

 

Seems to me the lack of verbal discussion is at the root of all the troubles here.  There are more employees than just the collections mgr; find one to talk to.

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9 hours ago, Burgerwars said:

It might be legal,  but I wouldn't say ethical.

If there are people in the back office of Joe Schmoe Credit Union looking at customers' payments and deciding to credit a customer's car payment to their credit card, so they can repossess the car tomorrow, that doesn't seem right.

 

I'd say it's unethical to apply for an actually use a credit card after having acknowledged understanding the Terms & Conditions when, in fact, the applicant was illiterate.  

 

Have yet to see a credit union that hid their tendencies to cross-collateralize and offset.  

 

We all know the Law of Unintended Consequences.  Well, this is the Law of Intended Consequences:  "Try to burn our credit union and we will make sure you get FITA."

 

Even if he finds a way to bring the car loan current (which I hope he does), he probably now will have a 30-day stain on his credit reports.  It's time to shite or get off the pot.  

 

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The CU giveth, the CU taketh away.

 

They can do it, you likely agreed to it. Is your payroll deposited to this CU as well? Might want to think about that.

 

I would be on the phone trying to make a deal with them, ask for an email address and follow up in writing.

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On 6/9/2019 at 6:55 AM, cv91915 said:

It's common for CU loan/account/membership agreements to include cross-collateralization language, which means that your car is pledged as security for any debts you have with the CU.  Read your agreements.

 

This doesn't make sense to you because you've been told over and over that CUs aren't like money-hungry banks who have to please greedy shareholders, with a CU you are a member and not just a customer, blahblahblah.   [stepping down off of soapbox now] 

 

The priority matter is pulling together whatever money you can today, and then negotiating something with the CU that allows you to keep your vehicle past tomorrow.  

 

 

I completely understand the cross collateral agreements, and I'd fully expect them to make me pay off the credit card balance AND car loan before releasing the lien.  I'd even somewhat expect them to shift some balance/equity around, etc.   But literally, they are removing a car payment and applying it to the card.....not only making the card current, but paying down the balance of the card while forcing the car to be in arrears.  That doesn't sound kosher to me..

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4 hours ago, discopanda said:

The CU giveth, the CU taketh away.

 

They can do it, you likely agreed to it. Is your payroll deposited to this CU as well? Might want to think about that.

 

I would be on the phone trying to make a deal with them, ask for an email address and follow up in writing.

Nope, no funds going into this CU.   Going forward, payments will only be made via debit card, using their baconpay site.   

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screw it, here are the full details and the email convo from today:

 

  • Loans:
    • Auto Loan
      • $415 payment
      • Due on the 15th
    • Credit Card
      • $60 payment
      • Due on the 25th
  • Intent To Repo Letter:
    • Sent Via First Class Mail,
      • Received on 6/6
      • $830 due by close of business on 6/10 ($830 in addition to the $500 payment they siphoned from 5/12)
      • Must pay in person via certified check
    • CT has different laws for repo, if an intent to repo letter is sent, or not sent.
      • Must be served in person or via CMRRR
      • Must be received at least 10 days before repo date
  • Payments made:
    • 5/12 - $500
    • 6/5 - $500
    • 6/7 - $100
    • 6/9 - $100

 

Emailed the collections manager today, copying the director of compliance and other Execs explaining that what she is doing is shady/unethical at best, and I not only have taken full responsibility, but I personally chose not to declare bankruptcy and I"ve been trying to make good on my debts.

 

I asked her kindly to stop being shady, as my payments applied to both accounts, more than makes them both current.

 

Her response:   Dear Former Member....your terms are acceptable.   Please note after the payments mentioned above are applied to the account, there are arrears of  $70 on the auto loan.   If paid this week, your next payment due will be JULY 15 - $415.  Your next card payment is due July 25 - $60.

 

So what she is saying, is that I really owe $70 of the $415 June payment....and that payment is not DUE for another 5 days.  So in reality, I am $0 in arrears.....it's all so shady!

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Once these loans are paid off, which organizations are the best for me to file complaints with?

 

I"m also going to provide the recordings to the former collections manager, so she understands that her former employer is telling members why she was terminated.

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18 minutes ago, DINOSAUR JOCKEY said:

Once these loans are paid off, which organizations are the best for me to file complaints with?

 

I"m also going to provide the recordings to the former collections manager, so she understands that her former employer is telling members why she was terminated.

what is the basis of the complaint? have you read the terms of your auto loan and card? see for example:

 

Quote

RIGHT TO REPAYMENT OF INDEBTEDNESS - You each agree that we may (without prior notice and when permitted by law) charge against and deduct from this account any due and payable debt any of you owe us now or in the future. If this account is owned by one or more of you as individuals, we may setoff any funds in the account against a due and payable debt a partnership owes us now or in the future, to the extent of your liability as a partner for the partnership debt. If your debt arises from a promissory note, then the amount of the due and payable debt will be the full amount we have demanded, as entitled under the terms of the note, and this amount may include any portion of the balance for which we have properly accelerated the due date. In addition to these contract rights, we may also have rights under a “statutory lien.” A “lien” on property is a creditor’s right to obtain ownership of the property in the event a debtor defaults on a debt. A “statutory lien” is one created by federal or state statute. If federal or state law provides us with a statutory lien,then we are authorized to apply, without prior notice, your shares and dividends to any debt you owe us, in accord with the statutory lien.Neither our contract rights nor rights under a statutory lien apply to this account if prohibited by law. For example, neither our contract rights nor rights under a statutory lien apply to this account if: (a) it is an Individual Retirement Account or similar tax-deferred account, or (b) the debt is created by a consumer credit transaction under a credit card plan (but this does not affect our rights under any consensual security interest), or (c) the debtor’s right of withdrawal arises only in a representative capacity, or (d) setoff is prohibited by the Military Lending Act or its implementing regulations. We will not be liable for the dishonor of any check or draft when the dishonor occurs because we charge and deduct an amount you owe us from your account. You agree to hold us harmless from any claim arising as a result of our exercise of our right to repayment

 

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12 hours ago, DINOSAUR JOCKEY said:

I completely understand the cross collateral agreements, and I'd fully expect them to make me pay off the credit card balance AND car loan before releasing the lien.  I'd even somewhat expect them to shift some balance/equity around, etc.   But literally, they are removing a car payment and applying it to the card.....not only making the card current, but paying down the balance of the card while forcing the car to be in arrears.  That doesn't sound kosher to me..

Respectfully, I don't disbelieve that you understand the concept, but you haven't posted anything from your actual agreements that supports your expectations. 

 

It doesn't matter what you'd expect, it matters what you actually agreed to, and of course, what the law allows.  

11 hours ago, hegemony said:

what is the basis of the complaint? have you read the terms of your auto loan and card? see for example:

Exactly.

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On 6/10/2019 at 6:06 PM, DINOSAUR JOCKEY said:

  That doesn't sound kosher to me..

After you went to your file cabinet and pulled out the loan agreements on ALL accounts you have with them, how does it sound NOW? 

 

This will all very likely have been spelled out in the contracts that you agreed to by signature or electronic signature. 

 

CU's represent their membership base.  When one walks a financial responsibility to the CU, they are directly harming other members.  It isn't some nameless, faceless building.  There are very distinct reasons that CU's historically represented small demographics and had the ability to make loans based upon character. 

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On 6/10/2019 at 6:25 PM, DINOSAUR JOCKEY said:

 

Her response:   Dear Former Member....your terms are acceptable.   Please note after the payments mentioned above are applied to the account, there are arrears of  $70 on the auto loan.   If paid this week, your next payment due will be JULY 15 - $415.  Your next card payment is due July 25 - $60.

 

So what she is saying, is that I really owe $70 of the $415 June payment....and that payment is not DUE for another 5 days.  So in reality, I am $0 in arrears.....it's all so shady!

No, what you were told is that they have accelerated the amounts due.  Should you choose not to comply, you will soon find yourself without a vehicle AND very likely embroiled in litigation regarding the remainder of the amounts that have been accelerated. 

 

You should promptly pursue a refinance through a different institution that addresses the entirety of the amounts remaining on the vehicle and card(s).

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