Consumer complaint received 2023-03-11
Company: NAVY FEDERAL CREDIT UNION
State: NC
Product: Vehicle loan or lease
Sub-product: Loan
Issue: Managing the loan or lease
Sub-issue: Problem with the interest rate

Complaint:
In XX/XX/XXXX, I went to a car dealership with a pre-approval from Navy Federal. Importantly I purchased the car with the pre-approval in New Jersey, and I am a North Carolina resident. Having paid the title fee, I was told by both the dealership and Navy Federal confirmed that the transfer of the title would be transferred to Navy Federal as required. While Navy Federal changed the initial interest rate from the one shown after the initial purchase should be noted, but it's not the primary concern I'm reporting here. 

In XX/XX/XXXX, I noticed Navy Federal had increased the rate of the loan to 15.29 % without notifying me of the increase in my rate. When I called Navy Federal in XXXX to inquire, they revealed that they had increased the rate because they had not received the title. I asked again if that was something I was supposed to provide them, and they confirmed that was something they receive in the normal course from the dealership. During the XXXX - XXXX time period, Navy Federal had sent me over 40 emails, almost all of which were marketing emails, but not a single email about the increase in rate or the missing document. Further, in the secure messaging on their own website, there was no message about the predatory increase or the failure of Navy Federal and the dealership to appropriately transfer the title. During this time, I received no phone calls or text messages from Navy Federal. On the phone, they claimed they sent a notification via mail, but I have never received the alleged correspondence. Further, they could not confirm the address they'd provided the notices. They claimed it was for security reasons, but I had already answered all their security questions and been cleared. Even if the " notification '' actually existed, it's obvious they were intentionally avoiding using a reliable communication channel ( email, secure mail, phone, or text messages ). They were not using the same communication tools they use to market their services or provide my typical account notices. On the phone, they told me I had to call the dealership, and there was nothing they could do. The loan would continue at the predatory rate. I called the dealership, XXXX XXXX XXXX in XXXX New Jersey, who confirmed they had appropriately handled the title in XX/XX/XXXX. At no point have I ever had possession of the title. 

Finally, I had the payments for the car payment set to autopay at the appropriate amount for the original rate. However, when they increased the rate without notifying me, one payment at the new predatory rate, was listed as not fully paid. I had to scramble to make up the {$300.00} in additional monthly interest to try to avoid this affecting my credit report. They have not confirmed that they will not report it as a missed payment on my credit report. 

Again, I tried to report this to Navy Federal, and they said they could not respond because I'd initiated this request through their mobile app. I notified them I would be contacting the CFPB as I could not resolve this with the bank directly. 

Please investigate the predatory auto lending practices and lack of appropriate notification at Navy Federal Credit Union. Auto Loan XXXX.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation