Many of the people I meet have their accounts at a credit union. Usually they like their credit union and assume that the credit union likes them back. And that may be true, generally.
But I recently came across a credit card agreement from a local credit union, for a Visa card.
On the second page of the agreement was this language:
THE GRANTING OF THIS SECURITY INTEREST IS A CONDITION FOR THE ISSUANCE OF CREDIT UNDER THIS AGREEMENT.
YOU SPECIFICALLY GRANT US A CONSENSUAL SECURITY INTEREST IN ALL INDIVIDUAL AND JOINT ACCOUNTS YOU HAVE WITH US NOW AND IN THE FUTURE TO SECURE REPAYMENT OF CREDIT EXTENDED UNDER THIS AGREEMENT. YOU ALSO AGREE THAT WE HAVE SIMILAR STATUTORY LIEN RIGHTS UNDER STATE AND/OR FEDERAL LAW. IF YOU ARE IN DEFAULT, WE CAN APPLY YOUR SHARES TO THE AMOUNT YOU OWE.
Shares and deposits in an Individual Retirement Account or any other account that would lose special tax treatment under state or federal law if given are not subject to this security interest.
If you have other loans with us, collateral securing such loans will also secure your obligations under this Agreement, unless that other collateral is your principal residence or non-purchase money household goods.
On the face of it, this means that if you have a credit card through that credit union, and if you have your wages or other income deposited into a checking or savings account at that same credit union, your money could be taken by the credit union and applied to your Visa card.
And if you file bankruptcy the credit union may freeze the funds on deposit on the day of filing and try to apply them to the Visa bill.
This is just another reason to not keep your money in the same place you owe money!