To answer your question would require more details regarding the loan terms on the car loan and the personal loan, and the terms on whatever security agreements you signed onto for each of the loans. Banks generally have the equitable right to "setoff" meaning the bank is allowed to take funds from one account a customer holds with them to pay a past due debt the same client has with that bank; however, that may not be applicable in your case. In any event, the bank should be giving you reasons why they are not releasing the title to you. It would be advisable to try and settle the issue yourself first, by writing a demand letter to the bank. Do not bring up or admit to the personal loan debt, just demand release of the car title and threaten lawsuit if they do not comply. If that doesn't work, it may be worth consulting an attorney. Based on what you've said, the banks actions may give rise to a Texas Deceptive Trade Practices Act (DTPA) claim, which allows you to recover attorney's fees and other additional damages under certain circumstances. Good luck!
It is hard to give you an informed answer based on these limited facts. You may have cross-collateralized the vehicle for the subsequent loan. You should hire an attorney to review the underlying documents and talk to the credit union on your behalf. My firm would be happy to assist you with this matter. You can contact me at WFB@BroemerLaw.com
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