Legal News for Credit Union Managers Since 1990
« Homestead Mortgage Cram-Down
Nondischargeable Debt »
28
Dec
2009

Deposit Insurance

In the case of Educational Employees Credit Union v. Mutual Guaranty Corporation (U.S. District Court, E.D. Missouri, No. 4:92CV1016), Educational Employees Credit Union formerly maintained deposit insurance with Mutual Guaranty Corporation of Tennessee.

The credit union cancelled said insurance with Mutual Guaranty when Missouri law required it be insured through NCUSIF.

The credit union had previously transferred more than 2 million dollars to Mutual Guaranty and, pursuant to the original contract between the parties, Mutual Guaranty was to return the deposit, less a 30% penalty, to any credit union withdrawing from the contract.

Subsequent to the original contract, however, Mutual Guaranty unilaterally amended the contract so that no funds would be returned to a withdrawing credit union.

Educational Employees Credit Union sued Mutual Guaranty Corporation for a return of funds.

The court held that although the original contract was amended to provide for no refund, a prevailing Missouri statute provided greater protection to the credit union and required Mutual Guaranty to return to the credit union more than 2 million dollars of its capital contribution, including a special assessment.

Author: Charles R. Harroun, Attorney at Law



This entry was posted on Monday, December 28th, 2009 at 4:32 am and is filed under National. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Leave a Reply

Your comment

Powered by WP Hashcash

  • Recently Posted Articles written by: Charels R. Harroun, Attorney at Law

    • False Application: Nondischargeable Debt
    • Truth in Lending Violation: Collateral Not Identified
    • Collateral Removed From State – Renewal of Perfected Lien
    • Credit Union & Its Attorney Violate Bankruptcy Stay
    • Credit Union Employee Policies
    • Wrongful Repossession & Conversion: Creditor Held Liable
    • “Investment” Information Provided to Member
    • Nonischargeable Cash Advances
    • Parental Liability: Minor’s Forged Check
    • Debt Cancellation Insurance
    • Credit Union’s Failure to Payoff Existing Mortgage

  • Website Builder

2009-2020 Copyright Harroun, P.C. | Credit Union Legal Newsletter powered by WordPress and Uchilla
Subscribe: Entries (RSS) and Comments (RSS)