Credit Union refusing credit due to a family members bad credit

[Raine91]

Oklahoma

We currently have a car loan at our Credit Union that is in default, we have told them we are filing bankruptcy.

My parents have excellent credit at this same Credit Union.

Recently my parents went in to get a car loan and was told that due to our defaulted loan, they would not give my parents a loan until our car loan was in good standing.

Can banks/credit unions use another family members bad loan to deny another family member a loan?

They flat out stated that once our car loan was brought up to date that they could have their loan no problem.

Our defaulted car loan is only in our name... my parents didnt cosign.

Any legal actions we can take against the Credit Union?

 

[LdiJ]

Oklahoma

We currently have a car loan at our Credit Union that is in default, we have told them we are filing bankruptcy.

My parents have excellent credit at this same Credit Union.

Recently my parents went in to get a car loan and was told that due to our defaulted loan, they would not give my parents a loan until our car loan was in good standing.

Can banks/credit unions use another family members bad loan to deny another family member a loan?

They flat out stated that once our car loan was brought up to date that they could have their loan no problem.

Our defaulted car loan is only in our name... my parents didnt cosign.

Any legal actions we can take against the Credit Union?

That is bizarre, and probably against all kinds of federal laws.

Just have your parents get a car loan somewhere else. If your parents have good credit, they can do it easily. In fact, If I were your parents I would be very tempted to move my money and ALL my business elsewhere.

 

[Zigner]

That is bizarre, and probably against all kinds of federal laws.

There is a law or laws that states that the CU can't refuse to loan on this basis? Please cite it (or them.)

Thanks.

 

[Antigone*]

There is a law or laws that states that the CU can't refuse to loan on this basis? Please cite it (or them.)

Thanks.

A credit union functions very differently from a commercial bank since the account holders are members. There are many things that a CU can do that a bank cannot.

As long as they are not denying credit because of race, color, etc, they can certainly extend credit to whomever they choose.

 

[Zigner]

A credit union functions very differently from a commercial bank since the account holders are members. There are many things that a CU can do that a bank cannot.

As long as they are not denying credit because of race, color, etc, they can certainly extend credit to whomever they choose.

Spoilsport.

 

[Hot Topic]

Oklahoma

We currently have a car loan at our Credit Union that is in default, we have told them we are filing bankruptcy.

My parents have excellent credit at this same Credit Union.

Recently my parents went in to get a car loan and was told that due to our defaulted loan, they would not give my parents a loan until our car loan was in good standing.

Can banks/credit unions use another family members bad loan to deny another family member a loan?

They flat out stated that once our car loan was brought up to date that they could have their loan no problem.

Our defaulted car loan is only in our name... my parents didnt cosign.

Any legal actions we can take against the Credit Union?

If you're filing bankruptcy, how are you going to take action against the credit union?

 

[LdiJ]

Spoilsport.

Based on what the OP said that was said. They basically told her parents that they needed to pay up the OP's car loan in order to get a loan of their own.

OP's car loan is part of a bankruptcy and the credit union cannot go after her. So they are basing a credit decision on someone else's credit. Maybe that isn't illegal but it is really bizarre. If they had just turned them down without that explanation I wouldn't question the possibility that it wasn't following the regs.

However again, if I encountered a situation like that I would take ALL of my business elsewhere, and I would be explaining exactly why to however was the CEO of the credit union.