Dedicated to Deposits: Deals, Data, and Discussion
Featured Savings Rates
Featured Accounts

CD Early Withdrawal Penalty Terms Ambiguity

Friday, May 6, 2011 - 9:44 AME-Central Credit Union - Details
Not only this Credit Union, but more and more I am seeing the below conflicting provisions in both CU and Banks' EWP clauses.  Like with E-Central, BOTH paragraphs exist within the CD Disclosure (these are E-Central's paragraphs 6. and 8.).

  • You may impose a penalty if I withdraw principal from my Term Share Certificate Account before the maturity date. The penalty will be as follows: Where the term is one year or less, the loss of 90 days dividends on the amount withdrawn whether or not earned. Where the term is more than one year, the loss of 180 days dividends on the amount withdrawn whether or not earned. Penalties may reduce principal balance. In addition, if a withdrawal reduces my balance below the Minimum Balance requirement, my account will be closed and the remaining funds will be transferred to my Membership Savings Account or IRA Savings Account, as appropriate.
  • I may make withdrawals of dividends at any time. I may not make deposits into or withdrawals of principal from my Term Share Certificate Account prior to maturity except during the Grace Period described above.
  • The CS people confirm that EW's are allowed with the penalty stated. When asked about the additional paragraph, they are uncertain but follow-up with that they do early withdrawals all the time.

    My contracts background always stipulated that if contract language was ambiguous, the courts would rule in favor of the party that did not draft the language and against the party who introduced the ambiguty.

    Still it is a growing concern.   Comments?
    2
    Lexus2134Lexus21343 posts since
    May 6, 2011
    Rep Points: 22
    Reply