CUNA Risk Alert Regarding Collection Letters
CUNA recently released a “Risk Alert” informing credit unions of an increase in class action suits based on defective notices of disposition of collateral and calculations of deficiency. Primarily used when a vehicle is repossessed after loan default, the Risk Alert referenced the model Uniform Commercial Code in citing the requirements for each of these notices. While much of the Illinois UCC tracks the model statute, it does contain some non-uniform provisions.
Credit unions in Illinois (State or Federally chartered) are encouraged to review the attached model forms to ensure consistency with the forms currently in use. These model forms were drafted to comply with Illinois law governing the repossession and disposition of collateral.
If there are any questions, please contact the League’s Office of General Counsel at 800-942-7124.