NORFOLK, Va. – A member of NAE FCU who enlisted in the Army after the credit union financed his pick-up truck is suing the credit union in federal court here for allegedly violating the Servicemembers Civil Relief Act by failing to reduce the terms of his loan and repossessing his vehicle.
The member, Michael Martin, borrowed $8,022 from the credit union in 2008 to buy a Dodge Ram 1500 at 10.5% interest. Two years later Martin enlisted in the Army and was sent for basic training, first to Ft. Lee, New Jersey, then to Fort Leonard Wood, Mo. At that point, Martin and his wife petitioned the credit union to abide by the provisions of the Servicemembers Act, which include a maximum loan rate of 6%.
NAE, originally the Norfolk (Ford) Assembly Employees FCU, is one of the surving mom-and-pop credit unions and is still run by Palmer Stillman, who chartered it in 1965, and is family, even as it has grown to more than $100 million in assets.
The Martins claim in their suit the credit union ignored their requests and instead accelerated their loan and required them to pay the entire balance of the loan to get their truck back, then repossessed the vehicle.
In their suit, they say the credit union not only caused them numerous expenses but also threatened Martin’s security clearance because of the negative mark on his credit report. They are asking for a $1 million in damages, as allowed under the terms of the Servicemembers law.
Officials with BAE FCU did not respond to a request for comment on the suit.
