Valor Credit Union - 1 more deposit

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Rob5TCP
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Valor Credit Union - 1 more deposit

Post by Rob5TCP » Mon Feb 22, 2016 12:35 pm

Just received a certified letter from Valor credit Union allowing deposits to existing CD's (max total is 25k) before 3-31-2016
if I sign a release form (which was enclosed).

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Re: Valor Credit Union - 1 more deposit

Post by LadyGeek » Mon Feb 22, 2016 4:26 pm

This thread is now in the Investing - Theory, News & General forum (CD).

Why do you need a release form?
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Re: Valor Credit Union - 1 more deposit

Post by Rob5TCP » Mon Feb 22, 2016 4:56 pm

LadyGeek wrote:This thread is now in the Investing - Theory, News & General forum (CD).

Why do you need a release form?
The release form is so that you don't sue Valor Credit Union for breaking the terms of the original CD (which had an add on provision).
This release allows you to make deposits (up to that limit of 25k) on to your 3.04% CD. My CD's have 5 more years to go.

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Re: Valor Credit Union - 1 more deposit

Post by HueyLD » Mon Feb 22, 2016 5:17 pm

Here is another example that a financial institution can change its agreement after you open a CD.

Not good!

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Re: Valor Credit Union - 1 more deposit

Post by Tanelorn » Mon Feb 22, 2016 5:19 pm

Rob5TCP wrote:Just received a certified letter from Valor credit Union allowing deposits to existing CD's (max total is 25k) before 3-31-2016
if I sign a release form (which was enclosed).
Why would you sign it?

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Re: Valor Credit Union - 1 more deposit

Post by Rob5TCP » Mon Feb 22, 2016 5:37 pm

I haven't yet - but if I wish to add to my existing CD - even if it's only $25,000; the form needs to be signed.
Even if we were able to overturn their release and force them to open for more money to be added to the account;
if it forced them into bankruptcy, it would be a Pyrrhic victory.

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Re: Valor Credit Union - 1 more deposit

Post by Phineas J. Whoopee » Mon Feb 22, 2016 7:39 pm

It's not clear why, if as you say the original CD has an add-on provision, you would agree to anything limiting it. Now, you haven't given us details about whether the original arrangement was better than the new one, but maybe it was. Can you tell us anything about that?
PJW

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Re: Valor Credit Union - 1 more deposit

Post by fsrph » Mon Feb 22, 2016 7:43 pm

Rob5TCP wrote:Just received a certified letter from Valor credit Union allowing deposits to existing CD's (max total is 25k) before 3-31-2016
if I sign a release form (which was enclosed).
Thanks for posting this. Today there was a card in the mailbox to retrieve a certified letter from Valor at the post office. Was going to pick it up tomorrow. Now I know what it's about.

The release form tells me a lot. If Valor truly believes they had a legally rock solid basis for cutting off future deposits the release is unnecessary. I don't know if I'll sign it. But, I just opened a NASA credit union 2.3% 49 month cd and that included funds that were to go to Valor. I could find another 25K to put in Valor if I choose to.

I wonder what happens if you don't sign the release form?

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Re: Valor Credit Union - 1 more deposit

Post by Rob5TCP » Mon Feb 22, 2016 7:46 pm

Phineas J. Whoopee wrote:It's not clear why, if as you say the original CD has an add-on provision, you would agree to anything limiting it. Now, you haven't given us details about whether the original arrangement was better than the new one, but maybe it was. Can you tell us anything about that?
PJW
About 6 weeks a post on described a letter that Valor sent out (I received it 2 weeks later) that they were no longer accepting add on deposits anymore to their 7 year CD (3.04%). Ken of Deposit Accounts was notified and a lot of people complained.

This is apparently their attempt to partially mollify those complaints. Valor is NOT in great financial shape; so I would rather get a small addition to my CD; then have the company go under in 3-6 months (or whenever) and then have to reinvest at potentially a much lower rate CD.

This is NOT the first time a change in an add on provision has happened. 7-8 years ago the same thing happened with Self Help Credit Union. There was no outcry; so that was that. Whether it would have helped is another topic.
Last edited by Rob5TCP on Mon Feb 22, 2016 7:48 pm, edited 1 time in total.

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Re: Valor Credit Union - 1 more deposit

Post by fsrph » Mon Feb 22, 2016 7:47 pm

Phineas J. Whoopee wrote:It's not clear why, if as you say the original CD has an add-on provision, you would agree to anything limiting it. Now, you haven't given us details about whether the original arrangement was better than the new one, but maybe it was. Can you tell us anything about that?
PJW
The original cd allowed unlimited add on deposits for the entire 7 year term. Last December Valor told us they were revoking the add on provision and we're not allowing any add on deposits. Many cd holders filed complaints with consumer protection agencies. Hence the one time add on deposit (max 25k) if you sign the release form.

Francis
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Re: Valor Credit Union - 1 more deposit

Post by Phineas J. Whoopee » Mon Feb 22, 2016 7:59 pm

Thanks, frsph. It appears, if I understand correctly, the credit union exercised their right to retroactively change the terms, as poster nisiprius rightly warns us of, and now is suggesting to retroactively change them again for those who sign the new agreement.

Can you give us more details about the release, as it's being termed here? Does it stop Valor from retroactively changing the agreement yet a third time, to undo whatever the release does?

I'm not suggesting, especially to OP, that anybody intentionally put Valor CU at risk of failure, even though I see from their homepage they're NCUA insured so the only risk would be not to receive the higher interest for the remainder of the term.

The reason this topic is so interesting is it speaks directly to the question of financial institutions changing term deposit contracts after the fact, as indeed many of their contracts give them the right to do. It's a case study. Maybe it's an early indicative study, and maybe not, but it's worth looking at in detail either way.

PJW

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Re: Valor Credit Union - 1 more deposit

Post by fsrph » Mon Feb 22, 2016 8:23 pm

Phineas J. Whoopee wrote:Thanks, frsph. It appears, if I understand correctly, the credit union exercised their right to retroactively change the terms, as poster nisiprius rightly warns us of, and now is suggesting to retroactively change them again for those who sign the new agreement.

That's correct.

Can you give us more details about the release, as it's being termed here? Does it stop Valor from retroactively changing the agreement yet a third time, to undo whatever the release does?

Didn't see the release form yet. Will pick up my certified letter from Valor tomorrow at the post office.

I'm not suggesting, especially to OP, that anybody intentionally put Valor CU at risk of failure, even though I see from their homepage they're NCUA insured so the only risk would be not to receive the higher interest for the remainder of the term.

The reason this topic is so interesting is it speaks directly to the question of financial institutions changing term deposit contracts after the fact, as indeed many of their contracts give them the right to do. It's a case study. Maybe it's an early indicative study, and maybe not, but it's worth looking at in detail either way.

It is interesting. The way Valor wrote the cd disclosure they can change any terms at any point in time. If that is so why even have a contract? I know other banks /credit unions have similar language but very, very few actually change the terms retroactively. I wonder what happens if you don't sign the release form?

PJW
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Re: Valor Credit Union - 1 more deposit

Post by Rob5TCP » Mon Feb 22, 2016 9:02 pm

fsrph wrote:
Phineas J. Whoopee wrote:Thanks, frsph. It appears, if I understand correctly, the credit union exercised their right to retroactively change the terms, as poster nisiprius rightly warns us of, and now is suggesting to retroactively change them again for those who sign the new agreement.

That's correct.

Can you give us more details about the release, as it's being termed here? Does it stop Valor from retroactively changing the agreement yet a third time, to undo whatever the release does?

Didn't see the release form yet. Will pick up my certified letter from Valor tomorrow at the post office.

I'm not suggesting, especially to OP, that anybody intentionally put Valor CU at risk of failure, even though I see from their homepage they're NCUA insured so the only risk would be not to receive the higher interest for the remainder of the term.

The reason this topic is so interesting is it speaks directly to the question of financial institutions changing term deposit contracts after the fact, as indeed many of their contracts give them the right to do. It's a case study. Maybe it's an early indicative study, and maybe not, but it's worth looking at in detail either way.

It is interesting. The way Valor wrote the cd disclosure they can change any terms at any point in time. If that is so why even have a contract? I know other banks /credit unions have similar language but very, very few actually change the terms retroactively. I wonder what happens if you don't sign the release form?

PJW
I have the release form:
It starts by mentioning it changed the add on provision and members protested. The release basically releases Valor from any responsibility pertaining to this change. It also states I won't give the provisions of this letter. So call it a release for Valdor.

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Re: Valor Credit Union - 1 more deposit

Post by john94549 » Mon Feb 22, 2016 9:11 pm

This reminds me of the discussion several years back over at Ken Tumin's blog when Ft. Knox FCU changed its EWP on existing CDs. Folks complained, even to the NCUA, without success. Other folks pondered suing for breach of contract, but I doubt any did ("damages", if any, would have been miniscule, and class action status problematic). Suing on the equity side (for "specific performance" on the contract) would have faced even more obstacles.

I'd bite the bullet, sign the release, and deposit the money. Then, when the CD matures, look at the bright side. 3%+ isn't such a bad rate.

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Re: Valor Credit Union - 1 more deposit

Post by Tanelorn » Mon Feb 22, 2016 11:07 pm

Rob5TCP wrote:i have the release form:
It starts by mentioning it changed the add on provision and members protested. The release basically releases Valor from any responsibility pertaining to this change. It also states I won't give the provisions of this letter. So call it a release for Valdor.
Sounds like it's probably illegal or at the very least they know they can be sued for what their trying to pull or they wouldn't include that part.

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Re: Valor Credit Union - 1 more deposit

Post by dm200 » Mon Feb 22, 2016 11:26 pm

I looked up Valor FCU on the NCUA web site (www.ncua.gov - go to research a credit union) and looked at their recent financial condition. They have (as of 12/31/15) assets of about $230 Million. In 2015, they had a LOSS of about $3.5 Million and their net worth to assets ratio dropped to under 7%. Any net worth to asset ratio under 7% (or heading that way) means they are facing challenges, both financially AND from NCUA.

it is not clear, from a quick look, what is causing their difficulties, but, almost certainly, these add on certificates (CDs) in a LOW rate envornment are adding to their "challenges".

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Re: Valor Credit Union - 1 more deposit

Post by Rob5TCP » Tue Feb 23, 2016 10:00 am

Here is the link about its financial standing -- there is a concern on Valor Credit Union
Although liquidity is good; quality of assets is not.


http://www.bankrate.com/rates/safe-soun ... ?cuid=9198

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Re: Valor Credit Union - 1 more deposit

Post by HueyLD » Tue Feb 23, 2016 10:49 am

The poor asset quality coupled with high cost of funds makes it a concern.

If one is real serious about the CU, take a look at its Call Report dated 12/31/2015.

I would keep the total amount of deposits at below the insurance limit.

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Re: Valor Credit Union - 1 more deposit

Post by fsrph » Tue Feb 23, 2016 11:21 am

Rob5TCP wrote:
fsrph wrote:
Phineas J. Whoopee wrote:Thanks, frsph. It appears, if I understand correctly, the credit union exercised their right to retroactively change the terms, as poster nisiprius rightly warns us of, and now is suggesting to retroactively change them again for those who sign the new agreement.

That's correct.

Can you give us more details about the release, as it's being termed here? Does it stop Valor from retroactively changing the agreement yet a third time, to undo whatever the release does?

Didn't see the release form yet. Will pick up my certified letter from Valor tomorrow at the post office.

I'm not suggesting, especially to OP, that anybody intentionally put Valor CU at risk of failure, even though I see from their homepage they're NCUA insured so the only risk would be not to receive the higher interest for the remainder of the term.

The reason this topic is so interesting is it speaks directly to the question of financial institutions changing term deposit contracts after the fact, as indeed many of their contracts give them the right to do. It's a case study. Maybe it's an early indicative study, and maybe not, but it's worth looking at in detail either way.

It is interesting. The way Valor wrote the cd disclosure they can change any terms at any point in time. If that is so why even have a contract? I know other banks /credit unions have similar language but very, very few actually change the terms retroactively. I wonder what happens if you don't sign the release form?

PJW
I have the release form:
It starts by mentioning it changed the add on provision and members protested. The release basically releases Valor from any responsibility pertaining to this change. It also states I won't give the provisions of this letter. So call it a release for Valdor.
I wonder why you can't release the provisions of the release. Maybe different offers for various investors?
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Re: Valor Credit Union - 1 more deposit

Post by Rob5TCP » Tue Feb 23, 2016 5:25 pm

fsrph wrote:
Rob5TCP wrote:
fsrph wrote:
Phineas J. Whoopee wrote:Thanks, frsph. It appears, if I understand correctly, the credit union exercised their right to retroactively change the terms, as poster nisiprius rightly warns us of, and now is suggesting to retroactively change them again for those who sign the new agreement.

That's correct.

Can you give us more details about the release, as it's being termed here? Does it stop Valor from retroactively changing the agreement yet a third time, to undo whatever the release does?

Didn't see the release form yet. Will pick up my certified letter from Valor tomorrow at the post office.

I'm not suggesting, especially to OP, that anybody intentionally put Valor CU at risk of failure, even though I see from their homepage they're NCUA insured so the only risk would be not to receive the higher interest for the remainder of the term.

The reason this topic is so interesting is it speaks directly to the question of financial institutions changing term deposit contracts after the fact, as indeed many of their contracts give them the right to do. It's a case study. Maybe it's an early indicative study, and maybe not, but it's worth looking at in detail either way.

It is interesting. The way Valor wrote the cd disclosure they can change any terms at any point in time. If that is so why even have a contract? I know other banks /credit unions have similar language but very, very few actually change the terms retroactively. I wonder what happens if you don't sign the release form?

PJW
I have the release form:
It starts by mentioning it changed the add on provision and members protested. The release basically releases Valor from any responsibility pertaining to this change. It also states I won't give the provisions of this letter. So call it a release for Valdor.
I wonder why you can't release the provisions of the release. Maybe different offers for various investors?
I doubt they gave different offers to different depositors. It probably is to keep adverse publicity to a minimum. Though it may have the opposite effect. I am reluctantly signing it along with a check for my 25k deposit.

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Re: Valor Credit Union - 1 more deposit

Post by fsrph » Wed Feb 24, 2016 6:11 pm

There's a good summary of this issue at Depositaccounts.Com (written by Ken Tumin).
https://www.depositaccounts.com/blog/20 ... cates.html
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Re: Valor Credit Union - 1 more deposit

Post by Rob5TCP » Wed Feb 24, 2016 7:12 pm

I emailed Mr. Tumin as soon as I received the letter (and started this post).
Ultimately I will just send in the 25k and allocate it to 2 different accounts.
I don't really think there is any other viable alternatives.
Not with the state that Valor is in.

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Re: Valor Credit Union - 1 more deposit

Post by Rob5TCP » Thu Feb 25, 2016 11:26 pm

A little more about Valor a/k/a Tobyhanna
this isn't the first time they have changed terms.
Just about a year ago they tacked on a 3% charge to any addition to the CD's
That one was rescinded. I doubt this one will be.

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