Consumer complaint received 2023-11-30
Company: PENTAGON FEDERAL CREDIT UNION
State: AL
Product: Payday loan, title loan, personal loan, or advance loan
Sub-product: Installment loan
Issue: Charged fees or interest you didn't expect

Complaint:
I have a personal loan with Pentagon Federal Credit Union ( PFCU ), in addition to my regular payment. On XX/XX/XXXX, I wanted to pay an additional amount towards the principal. PFCU, requires you to call an XXXX number if want to make a principal only payment. When you call the number there are many options but none specifically for principal only payments. Eventually, after much time being wasted in the que to get to a live representative you can start the the process to make a principal only payment. In my case, I wanted to pay with my debit card from another financial institution. The representative said they could not accept the payment from the card. It just so happened that I do have link from that account to PFCU. 
Note : That despite the fact that this account is linked to PFCU, they will not allow me to electronically make a principal only payment towards my loan unless I process it through the XXXX number or allow me to use my debit card to make the payment. 
To make the principal only payment, I had to agree to allow them to receive the payment via ACH once I agree to this, I'm told there is a 5 % fee for an ACH transfer but she would waive the fee on this occasion. 
I explained to her this was unfair and not common to the other credit unions that I have dealt with in a similar manner when making a principal only payment. I explained to her that at other credit unions the customer identifies the payment as principal only and the funds are applied accordingly. I also explained that was unfair to charge a fee when the customer is attempting to pay the loan off early. I asked her would I have to do this each time I wanted to make an interest only payment? Her response was yes, or I could electronically deposit funds in my PFCU share account and call the XXXX number and request that it be withdrawn. Therefore, I could avoid the fee. 
I then said that in the future I would send the payment by check indicating it as a principal only payment. She said a check payment would not be accepted. I informed her that it was illegal to not accept a check payment towards the principal. She checked with her supervisor who indicated to her that they would not process a principal only payment by check because it required mechanical processing where in their case they operate only in electronic processing. 
I explained to her that both her and her supervisor was forcing customers into a situation of usury. I also explained that it was illegal for financial institutions to decline a payment made in good faith towards resolving a debt. I also stated, that I bank with may other credit unions and XXXX and none of these financial organizations have such restrictions or barriers to make principal only payments difficult or almost impossible. 
I request that the CFPB check into this matter and hopefully resolve this situation so that other customers and those that do not have adequate internet access to be forced into such an unfair and illegal practice.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation