Navy Federal Credit Union NFCU NFCU Illegally Raiding Deposit Accounts to Pay Credit Accounts

... and why it doesn't apply to credit card accounts.

http://www.helpwithmybank.gov/get-answers/bank-accounts/right-of-offset/faq-bank-accounts-right-of-offset-01.html

Don't be sheep.

Dear Striderq -

Respectfully, you are mistaken.  "Every bank and credit union" does not have "a right to offset."   Any bank or credit union could impose such a condition at the time of opening an account, but as you point out, the account holder would have to consent to that condition at the time of opening account.  That account holder's signature had better be on file. 

I have an acquatance who got into just that argument with another, unrelated bank.  The bank told him that he had, in fact, signed such consent.  Upon demanding proof they sent him what was a clear forgery.

I personally have never accepted such a condition with any financial institution, nor would I.  If our banking system - dirty and corrupt as it is - ever gets to the point where I cannot find an institution which will serve me without imposing such a condition, I will no longer maintain savings, checking, brokerage or money market accounts with the same institution which provides me a credit card.  I will restore the firewall by taking my business elsewhere.

That's really not hard to do: consider, you can easily get an Amazon credit card, for example.  Amazon requires no deposits in an account to offset potential disputes.  That's because it is a credit card, not a debit card.  

I hope all readers take a moment to ponder that before accepting one more raw, one-way deal from the banks.  Credit cards are a very profitable business.  I'd invite you to read your credit card and account holder agreements now and see if you agreed to any "right to offset."  (Hint: doubtful.  It assumes the existance of both accounts, and therefore is a condition of neither.  It would likely have to be a third, seperate form, which would garner all kinds of unwanted attention at the moment the financial institution is trying to new business.)  If you did... pack up and leave.

The bank or credit union more than covers its risk in the credit card business by charging high fees and interest rates.  If customers eliminate that risk by permitting the institution to create a "right to offstet," which it can insert in a contract, true, but does not exist in law, then the customer is 1) paying high fees, 2) absorbing all the risk, and 3) surrendering all the rights that he or she might enjoy in a civil proceeding over a disputed charge.  If there's a dissagreement, and the merchant and/or credit union doesn't agree with the customers position... they will take what they want from your savings.  The. End.

Don't be sheeple.  Consumer protection grows weaker by the day as even member-owned credit unions find new ways to fleece and rip us off.  Dianna Driscol fought back and won, which is likely the strongest rebuttle to Striderq's claim that there is...

Peace. 

 I don't kn the details of the lawsuit so I can't comment on it. However, every bank and credit union has the right to take money from an account that's positive to cover a negative account if the accounts have the same name on them. It's called Right To Offset and is included in the Terms and Conditions paperwork that you sign when you open the account.

If Sally Smith has a checking account that goes into the negative and is not cleared in a timely manner, the financial institute can go into any and all accounts that Sally is registered as an owner of to recover the money to bring her checking account t a zero balance. If the account she's on is one with her mother, her chil(ren), her spouse, etc it doesn't matter. If NFCU decided to settle the case thn there's something more than just a negative, unpaid amount on her credit vrd. It may have been because of the dispute or another reason, but Right To Offset can and does happen every day.