Gardner v. Montgomery County Teachers Federal Credit Union
United States District Court for the District of Maryland
864 F. Supp. 2d 410 (2012)

- Written by Alex Ruskell, JD
Facts
Kevin Gardner (plaintiff) brought a putative class-action lawsuit against the Montgomery County Teachers Federal Credit Union (defendant) after Montgomery took funds from his checking and savings account on deposit with Montgomery to pay the amount due on his credit card account. Under the Truth in Lending Act, a card issuer was prohibited from offsetting a cardholder’s indebtedness by taking funds from other accounts deposited with the card issuer. Montgomery defended itself by claiming its actions were not a mere offset but were allowed because it had a security interest in Gardner’s other accounts. Although Montgomery could not produce a signed credit card agreement, it pointed to language in its standard agreement that was on the eighth page of 20 pages of fine print that purported to create a security interest in Gardner’s other accounts. The agreement was sent to all cardholders after they got their cards.
Rule of Law
Issue
Holding and Reasoning (Bredar, J.)
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