The NAFCU Journal July-August 2020 - 18

says. Control means having someone in
charge of making sure that everyone who
serves the member knows the agreement
backward and forward, and anyone
involved with credit reporting knows the
FCRA backward and forward.

DISRUPTED WORLD

When the economy goes down, lawsuits
go up. As such, the disruptive COVID-19
crisis is certain to be felt in the litigation
landscape. "In good times, there tends
to be a little less litigation," Hunt says. "If,
ultimately, we have an extended period
of economic stress, we could see some
lawsuits pop up down the road."
Bredehoft agrees that "when the economy
slows down, the sharks circle." Plaintiffs'
attorneys will look for minor technical
changes in laws that institutions might not
have implemented. Plus, financial institutions are suddenly confronting the legal
repercussions of issues they'd never had to
address before - such as whether to bar
someone who appears ill from entering
a branch, or how to give lunch breaks to
employees who can't leave the building.
"We're going into so many unseen fields,"
Bredehoft says. "We haven't been preparing for them, and working through these
matters is difficult."
New laws, regulations and rules that
contradict one another present a major
challenge in the COVID-19 era, Bredehoft says. He advises that credit unions
make every decision with an eye on
the future, documenting the rationale
for each one. "Not 20-page memos, but
at least memorialized in an email that
is permanent, because that kind of thinking is hard to re-create afterward."

''

As more credit unions become susceptible to class actions, an increasing
number are considering arbitration
clauses in their member and account
agreements, Scoggins says. The idea
of prohibiting class-action suits might
have once seemed antithetical to credit
unions, but "now we're seeing that
tide turn."
Arbitration clauses have pros and cons.
They can help ward off class-action cases
but, unlike lawsuits, arbitration decisions
can't be appealed. Plus, arbitration can
be expensive, and in some circumstances,
attorney fees are not recoverable.
"It's a very specific analysis and riskbenefit analysis that each credit union
has to make carefully after talking with
their attorneys," Scoggins says.
Bredehoft warns that pandemic-inspired
good deeds can have unintended
consequences. During the pandemic,
many credit unions are easing their
terms and policies, perhaps suspending repossessions or lifting mortgage
payment requirements for a period.

However, without careful legal review,
documents presenting the policies
could yield essential powers beyond
the crisis parameters.
"You don't want to give up all right ever
to collect money on the mortgage,"
says Bredehoft. "You need precise legal
wording in some states when you make
modifications. Getting that kind of
focused advice can keep you out of trouble that can cost so much more later."
In the suddenly disrupted economy, it's
not only the large credit unions that
should constantly scan the horizon for
litigation risk. The credit union industry's relative health means that small
and midsize institutions could appear
on the radar of plaintiffs' attorneys
seeking new targets.
"Litigation risk," says Hunt, "is
something all credit unions have to
face and address."
M. Diane McCormick is a freelance
journalist and a frequent contributor
to The NAFCU Journal.

In good times, there tends to be a little less
litigation. If, ultimately, we have an extended period
of economic stress, we could see some lawsuits
pop up down the road.

''

- CARRIE HUNT, EXECUTIVE VICE PRESIDENT OF GOVERNMENT AFFAIRS AND GENERAL COUNSEL, NAFCU

18

THE NAFCU JOURNAL JULY-AUGUST 2020



The NAFCU Journal July-August 2020

Table of Contents for the Digital Edition of The NAFCU Journal July-August 2020

The NAFCU Journal July-August 2020 - Cover1
The NAFCU Journal July-August 2020 - Cover2
The NAFCU Journal July-August 2020 - 1
The NAFCU Journal July-August 2020 - 2
The NAFCU Journal July-August 2020 - 3
The NAFCU Journal July-August 2020 - 4
The NAFCU Journal July-August 2020 - 5
The NAFCU Journal July-August 2020 - 6
The NAFCU Journal July-August 2020 - 7
The NAFCU Journal July-August 2020 - 8
The NAFCU Journal July-August 2020 - 9
The NAFCU Journal July-August 2020 - 10
The NAFCU Journal July-August 2020 - 11
The NAFCU Journal July-August 2020 - 12
The NAFCU Journal July-August 2020 - 13
The NAFCU Journal July-August 2020 - 14
The NAFCU Journal July-August 2020 - 15
The NAFCU Journal July-August 2020 - 16
The NAFCU Journal July-August 2020 - 17
The NAFCU Journal July-August 2020 - 18
The NAFCU Journal July-August 2020 - 19
The NAFCU Journal July-August 2020 - 20
The NAFCU Journal July-August 2020 - 21
The NAFCU Journal July-August 2020 - 22
The NAFCU Journal July-August 2020 - 23
The NAFCU Journal July-August 2020 - 24
The NAFCU Journal July-August 2020 - 25
The NAFCU Journal July-August 2020 - 26
The NAFCU Journal July-August 2020 - 27
The NAFCU Journal July-August 2020 - 28
The NAFCU Journal July-August 2020 - 29
The NAFCU Journal July-August 2020 - 30
The NAFCU Journal July-August 2020 - 31
The NAFCU Journal July-August 2020 - 32
The NAFCU Journal July-August 2020 - 33
The NAFCU Journal July-August 2020 - 34
The NAFCU Journal July-August 2020 - 35
The NAFCU Journal July-August 2020 - 36
The NAFCU Journal July-August 2020 - 37
The NAFCU Journal July-August 2020 - 38
The NAFCU Journal July-August 2020 - 39
The NAFCU Journal July-August 2020 - 40
The NAFCU Journal July-August 2020 - 41
The NAFCU Journal July-August 2020 - 42
The NAFCU Journal July-August 2020 - 43
The NAFCU Journal July-August 2020 - 44
The NAFCU Journal July-August 2020 - 45
The NAFCU Journal July-August 2020 - 46
The NAFCU Journal July-August 2020 - 47
The NAFCU Journal July-August 2020 - 48
The NAFCU Journal July-August 2020 - 49
The NAFCU Journal July-August 2020 - 50
The NAFCU Journal July-August 2020 - 51
The NAFCU Journal July-August 2020 - 52
The NAFCU Journal July-August 2020 - 53
The NAFCU Journal July-August 2020 - 54
The NAFCU Journal July-August 2020 - 55
The NAFCU Journal July-August 2020 - 56
The NAFCU Journal July-August 2020 - 57
The NAFCU Journal July-August 2020 - 58
The NAFCU Journal July-August 2020 - 59
The NAFCU Journal July-August 2020 - 60
The NAFCU Journal July-August 2020 - 61
The NAFCU Journal July-August 2020 - 62
The NAFCU Journal July-August 2020 - 63
The NAFCU Journal July-August 2020 - 64
The NAFCU Journal July-August 2020 - Cover3
The NAFCU Journal July-August 2020 - Cover4
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