Given the number of legal requirements, credit unions can easily miss one or more when repossessing collateral upon a member's default. The number of lawsuits over repossessions is increasing.

Because forms are often utilized for this process, one omission or error can turn into multiple violations. Increased class-action litigation in this area elevates the importance of reviewing forms and processes related to repossession.

Repossession laws vary by state. Most states have adopted a version of the Uniform Commercial Code, which provides form notice language to fulfill statutory requirements. For example, Maryland and Washington, D.C., have adopted standard UCC provisions to govern repossession and the notices that must be provided to consumers before disposition of property. Credit unions also need to ensure their repossession practices comply with local law.