Judge Denies Fiserv Motion to Dismiss Polam Federal Credit Union Lawsuit

A judge has allowed Polam Federal Credit Union’s case against Fiserv to move forward after denying the company’s motion to dismiss on Thursday, June 18. For PSPs and core processors, the case is a reminder that contract language, security claims, and early-termination fees can all end up being litigated together, not neatly separated into different buckets.

1. Polam FCU alleges that Fiserv breached its contract, misrepresented the security of its systems, and imposed improper early-termination fees, according to CU Today. The ruling does not resolve those claims, but it does keep the lawsuit alive.
2. Polam FCU CEO Jennifer Audette said, “Our Board of Directors and I are extremely grateful for our legal representation and encouraged by this significant first win against the ‘big guys.’” Charles Nerko of Nerko PLLC, one of the credit union’s attorneys, said: “The legal process is a key tool credit unions can use to turn vendor frustrations into recoveries.”
3. According to CU Today, four other credit unions — Self-Help Credit Union, FiCare Federal Credit Union, Educational & Governmental Employees Federal Credit Union and Midwest Family Federal Credit Union — are pursuing similar litigation against Fiserv. Fiserv has also settled similar lawsuits brought by Bessemer System Federal Credit Union, Cencap Federal Credit Union and U.S. Court House SDNY Federal Credit Union.
4. The CUDaily reported that Polam FCU filed its lawsuit on March 5 and alleged that Fiserv failed to implement basic cybersecurity protections and tried to force the credit union to buy a replacement security product while still under contract. Polam FCU is seeking damages, recovery of payments for services it says were deficient, an order blocking exit fees, and an order requiring Fiserv to improve safeguards for member information.
5. PYMNTS reported in May that Fiserv’s organic revenue fell 4% in the first quarter, with merchant solutions revenue down 1% and financial solutions down 6%. The company described 2026 as a transition period.