Product: Checking or savings account

First tech Federal Credit union erroneously took wrong amount of money from my checking account, when presented with a check that I wrote to a third party. 

The check that I wrote has the correct amount ( have check image to prove this ). 
The amount withdrawn from my account was incorrect ( exceeding correct amount by {$450.00} ). 

The error went unnoticed for a considerable time. I discovered it approx two years later when researching another unrelated matter. I immediately requested a refund of the excess {$450.00} taken. 

Initial telephone call to customer service on approx XX/XX/XXXX resulted in a flat refusal to correct the error. Subsequent attempts to escalate ( details below ) have been similarly refused. 

The basic facts are not in dispute. Credit union admits that my check was written for the correct amount, and that they withdrew {$450.00} too much, in error. Nonetheless, they refuse to correct the error on the basis of the following two arguments : 1. That the error was made by a third party ( XXXX XXXX XXXX ) somehow involved in the processing of the check. 

My banking relationship is only with First Tech, and so I contend they are responsible for the safe-keeping of my funds regardless of which institution they are currently blaming for the mistake. I have no connection or relationship with the third party bank, only First Tech does. 

2. The second argument put forth by First Tech for refusing to correct the error is that it was not reported for a little over two years. ( Original error posted in XX/XX/XXXX, I discovered and reported it in XX/XX/XXXX ), and that Federal Reserve regulations forbid them from correcting such an error after a shorter time limit ( I think they said 60 days? ). 

My response to this second argument is that while the Federal Reserve regulations may preclude them from " undoing '' the original mistake in the original ledger, there are no rules precluding them from doing the morally correct thing, which is to refund the {$450.00} of my money which they admit they took, unauthorized, from the funds that I have on deposit with them. 

This is a serious breech of the trust I placed in the credit union. 

If a financial institution can unilaterally help themselves to a client 's money, without authorization, and then refuse to correct the situation even while they admit to the facts of the situation, then how is anybody meant to trust financial institutions with the custody of their money? 

Further attempts to escalate : 1. Escalated to customer service supervisor on XX/XX/XXXX ( XXXX XXXX, Asst Manager XXXX ). 
Outcome : Same. First Tech acknowledges the error but refuses to correct it. 

2. Escalated to Support Manager XXXX XXXX ( Member Experience Team ) on same day. Did not speak directly to him -- the customer service team handed off the package to him at my insistence. 

Outcome : Received email response on XX/XX/XXXX from XXXX XXXX ( attached ). No change, still acknowledge the error and refuse to correct it. 
This communication emphasizes that they are placing the blame for the error on a third part institution ( XXXX XXXX XXXX ). However, I had no dealings with this third party. I only dealt with First Tech, and expect them to take responsibility for my funds on deposit with them.