Profits Before People
by Keith Leggett
Credit unions like to talk about how they put people ahead of profits; but a complaint before the South Dakota Supreme Court against Black Hills Federal Credit Union (Rapid City, SD) and CUNA Mutual Insurance Society (CUMIS) seeking class certification paints an entirely different picture.
The issue deals with credit disability insurance sold by Black Hills FCU to borrowers provided by CUMIS.
The complaint states that on July 1, 1999 Black Hills FCU unilaterally changed the terms of the policy by increasing what it charged for coverage with negligible increase in disability coverage. According to the complaint, the new coverage was 68% more expensive than the coverage that the insureds bought.
It alleges that CUMIS and Black Hills FCU consulted with each other before changing the terms and determined that the change would bring them significant financial benefit.
The complaint states the Black Hill FCU consulted with CUMIS on the placement of the “Notice to Members” so that the notice would not attract attention.
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