As the regulatory burden continues to result in significant litigation risk and today’s business climate becomes more complex for credit unions, the League continues to scan the legal horizon to protect credit union interests. That’s why, earlier this year, the League submitted an amicus brief to the Ohio Supreme Court regarding cognovit, or confessions of judgment, clauses in the Sutton Bank v. Progressive Polymers case. The brief outlined how cognovits remain useful to member business lending and argued that any derogation from their being strictly applied would be detrimental for credit unions and other financial institutions alike. The Ohio Supreme Court recently decided it agrees and reversed the lower court's ruling in the case, keeping cognovits enforceable within the State of Ohio. You can find the Court’s decision here.
The League will continue its legal advocacy efforts behalf of credit unions in order to make sure you are protected and able to forecast and defend against any legal issues that may come your way. If you have questions or concerns about the Ohio Supreme Court’s decision regarding cognovit provisions, please contact League Regulatory Counsel Chris Noble.