MADISON, Wis.–More than 200 members of UW Credit Union have signed a letter objecting to a decision by the CU to move to a model of forced arbitration to resolve disputes.
It’s a change that “some members say was made quietly, with little time to opt out and in direct conflict with the democratic values of a member-owned financial cooperative,” according to Madison.com.
UWCU sent a letter to its nearly 300,000 members informing them about its move to arbitration, a “way to privately resolve grievances behind closed doors and outside the court system,” Madison.com noted. “Members would lose their right to sue, aside from filing in small claims court, unless they opt out of arbitration within the next 30 days.” The deadline ends June 9.
According to the report, UWCU gave just one way to communicate they weren't on board: dropping a letter in the mail.
Jake Schlachter, a UW Credit Union member, was quoted by Madison.com as saying the communications strategy “seemed designed to draw as little attention to the change as possible and offer members an inconvenient way to respond in the Internet age. He noted many people don't have a printer at home or stamps on hand.”
"If the credit union actually wants its members to know something, how can it do that?" Schlachter told Madison.com. "It can put information on the website, send an email or a note through the online banking portal. But no, it chose to send a single letter in the mail, the absolute minimum."
UWCU Statement
UWCU spokesperson Anne Norman told Madison.com members can also opt out by sending a message through the credit union’s portal.
In a statement, UW Credit Union cited the shifting legal landscape and frequency of unnecessary, avoidable and expensive class action lawsuits as reasons for the change and noted the credit union will cover the cost of arbitration, according to the report.
Brett Thompson, president and CEO of Wisconsin Credit Union League, told Madison.com frivolous legal threats are a growing trend afflicting credit unions in recent years.
"These suits are extremely costly to the credit union," Thompson told the publication. "The membership base is paying for that, so credit unions feel they're wasting their members’ money."
Members Say They Were Muted
According to Madison.com, Schlachter and about two dozen others attempted to voice their concern at the credit union's annual meeting, which was held online last week.
“But they say they were muted from speaking and all but one of their questions submitted through the platform's chatbox went unanswered,” Madison.com reported. “Members left the meeting with the impression that Kundert would follow up with them about their concerns, which they said hasn't happened.”
But UWCU disputed that suggestion.
In a statement UWCU Chairman Steve Rick, who is also chief economist with CUNA Mutual Group, "responded comprehensively" to questions raised in the chat, the credit union told Madison.com.
“Kundert also supplied his email address and invited members to send more questions, which the credit union said he hasn't received,” the report added.
Members Sign Letter
According to Madison.com, nearly 200 members signed a letter asking the credit union to reverse its policy, or at the very least extend the window of time for people to opt out of it. If that doesn't work, he said members will look to elect new individuals to serve on the credit union's board, Schlachter told Madison.com.
Amazon Goes Other Direction
The UWCU decision comes at nearly the same time Amazon announced it has changed its terms of service to allow customers to file lawsuits. The retail giant made the change after plaintiffs’ lawyers flooded Amazon with more than 75,000 individual arbitration demands on behalf of Echo users. That move triggered a bill for tens of millions of dollars in filing fees, according to lawyers involved, payable by Amazon.