IANAL but that's not my reading of the CU legislation and I fail to see where it provides for discretionary powers on the part of the CU/board in this context. Can you clarify why you or other CUs/boards believe this to be the case?
This sets out the law in this case....
"32.—(1) …
(2) … a credit union may require not less than 21 days' notice from a member of his intention to withdraw a deposit.
(3) If a member of a credit union seeks to withdraw a share in or deposit with the credit union at a time when he has [a loan outstanding], that withdrawal shall not be permitted unless—
(
a) were the withdrawal to be permitted, the value of the member's savings immediately after the withdrawal would be not less than the amount of his outstanding liability;
or
(
b) the withdrawal is approved, in accordance with the registered rules, by a majority of the members of the board of directors voting at a meeting of the board;
but no approval may be given under
paragraph (b) if, were the withdrawal to be approved, the value of the member's savings immediately after the withdrawal would be less than 25 per cent. of his outstanding liability.
(4) If the Registrar sees fit to do so in the circumstances of a credit union, he may, on such terms as he thinks proper, by notice in writing addressed to the credit union provide that
subsection (3) shall apply in relation to the credit union with the substitution of a higher or lower percentage than [25%]
(5) Where a member of a credit union is indebted to the credit union and consents in writing to the credit union acting under this subsection, the credit union may, by way of set-off against the indebtedness, withdraw any of the member's shares or deposits; and such a withdrawal may be made notwithstanding anything in
subsections (2) and
(3)."
Some Credit Unions charge individual accounts for the insurance and others charge it as a general expense.
Many credit unions are taking actions against their members these days.