Q: Can a credit union bank take funds from your account to pay a delinquent credit card balance?
Does a credit union bank have the authority to take funds from a consumer's checking account to pay a delinquent credit card payment if the credit card was opened through the bank?
A:
Yes. Any regulated financial institution has a legal "right of set off" in situations where there is money in one account but insufficient money in another account at the same bank. And it does not matter if there are other people who also own the account where the bank takes the money from either. I have advised many clients of the wisdom of having more than one bank account in separate banks because there is no right of set off when different banks are involved.
Finally, I have been involved in cases where a client's main bank was bought out by another bank the client owed money to; can you guess what happened when the acquiring bank found out there were funds available in the acquired bank to cover bad loans and ODs?
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