Members sue Maryland Credit Union for alleged TILA violations
Marriott Employees FCU denies claims in lawsuit seeking $1 million in damages.
The $188 million Marriott Employees Federal Credit Union asked a federal judge to throw out a civil lawsuit brought by two members. They claimed the Bethesda, Md.-based credit union violated the Truth in Lending Act by failing to disclose the true cost of mini-loans for which members were allegedly charged an interest rate of 46%.
MEFCU argued in documents filed in U.S. District Court in Philadelphia earlier this month that the lawsuit failed to prove TILA violations.
The lawsuit’s plaintiffs are Katherine Payne and Arthur Coates both of Philadelphia who are Marriott hotel employees. Since the hotel chain controls the amount of hours employees work, they use MEFCU’s $500 mini-loan to make ends meet whenever their employer reduces their work hours, according to the lawsuit.
Payne’s and Coates’ MEFCU’s mini-loan credit agreements disclosed an 18% APR based on a finance charge of $29.23 for the six-month loan. However, Payne and Coates were also required to pay a $35 application fee after their loans were approved.
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