Navy Federal takes money from children
Last month, Navy Federal emptied out the savings account where 14 year old Tammy (not her real name) saved the money she made baby sitting.
Tammy’s mom had been out of work for nine months. She was now two months behind on her second mortgage. (The second mortgage was from Navy Federal.) She just got a new job paying half of what she had been making, and she was glad to get that. But she knew she would not be able to pay the second mortgage and still feed her children.
So Tammy’s mom came to see me about filing bankruptcy. But she mentioned in passing that Navy Fed has helped themselves to her daughter’s savings account. How could they do it?
First time I heard of Navy Fed doing this, I was shocked too. But I figured out how they do it.
Most banks set up children’s accounts under the Uniform Transfers to Minor’s Act, where the parent is the custodian of the account, but the child is the owner.
Navy Fed apparently doesn’t do it that way. Instead they set up a joint account, with the parent and the child. This gives them right, as they see it, then to take Tammy’s money to make mom’s payment.
I think that stinks. The child, by definition, is a child, and hasn’t agreed to co-sign for mom. So I don’t think the credit union can pretend the little girl did.
I’ll see if I can find a judge who agrees with me on this.
The big lesson of this. If you lose your job, take your money out of Navy Federal. And that include’s your children’s money, too.
PS Navy Federal did back down on this when we sued them–and the little girls have their money back. May 2011