Consumer complaint received 2024-01-12
Product: Checking or savings account — Savings account
Issue: Managing an account — Cashing a check
Company: NAVY FEDERAL CREDIT UNION (NV)

On Saturday XX/XX/2023, I deposited a {$72000.00} cashiers checkpaid to myself and drawn from my XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXXnto my Navy Federal Credit Union savings account . 

On Monday XX/XX/2023 NFCU notified me of its intent to hold my deposit for 5 business days, citing reasonable cause to believe the check is uncollectible from the paying bank based on confidential information that indicates that the check may not be paid. This language is consistent with subsection 12 CFR 229.13 ( g ) Notice of Exception, which is required when a financial institution invokes subsection 12 CFR 229.13 ( e ) Reasonable Cause to Doub Collectability to delay the deposit of a check.

I am alleging that NFCU did not have reasonable cause to doubt the collectability of the check and has thus violated 12 CFR 229.10 ( c ) ( v ) which dictates the check should have been made available on the next business day ( XX/XX/2023 ). 
-- - I am alleging this for the following reasons : 1. Navy Federal Credit Union has repeatedly evaded requests to explain any cause for believing that my cashiers check would not be paid despite multiple requests by phone and in-writing. 

On Wednesday XX/XX/XXXX, in two separate calls with three agentsincluding two supervisorsat XXXX and XXXX respectively, NFCU personnel provided vague explanations about the hold. During these calls I was told multiple times that NFCU sends similar written notices to all customers whose checks are held regardless of the reason and that all checks in excess of {$1000.00} are subject to holds. Even if these were true, no agent spoke to the causes in my specific case. When I requested elevation to the Escalation Case Manager Team ( Resolution Department ), a representative named XXXX initially wrote me back : This message is regarding your recent concerns raised via phone call to our Contact Center. After you spoke with a XXXX, your concerns were elevated to and thoroughly reviewed by our Escalation Case Management team. At this time, we do not have any other solutions to offer for your concerns and consider this escalation case closed.

After pressing the representative further, he stated multiple nondescript reasons why a check may be held and then refused to respond further.

2. The payor bank XXXX XXXX  ) reports that it did not indicate the check would not be paid to NFCU and had no cause to do so. 

On Wednesday XX/XX/XXXX at XXXX PST, I contacted the XXXX XXXX  ( XXXX ) who issued the cashiers check. In a XXXX minute call, an XXXX agent researched my case and explained XXXX had not advised the check be held nor had any cause to do so, because my banking history was long, exemplary, absent returned checks or overdrafts and that I had maintained a history of high balances in my savings account to cover the cashiers check. 

3. Navy Federal Credit Union had no reason to suspect check kiting, pending insolvency or other condition that might lead to the check being unpaid.

I hold several banking services with NFCU including one consumer loan, banking and checking accounts, and digital financial services that provide NFCU significant with insight into my financial condition ( including balances, credit score, and credit history ). Such insight would preclude any notion of suspicion that the check would not be paid.

- NFCU is likely aware that I maintain a high credit score and have no defaults that might indicate financial trouble.

- NFCU is likely aware that I have no bankruptcy filings or pending insolvency.

- NFCU might be aware that I have no civil suits or criminal cases filed against me.

- My FCCU account is directly linked to my NFCU account in NFCUs digital services portal, and I have a history of moving large sums of money in excess of {$20000.00} between accounts in these two credit unions. This fact directly refutes any fabrication that I may have been check kiting. 

XXXX. During my XX/XX/XXXX calls with NFCU, I inquired about whether bias contributed to this hold and shared a concerning interaction with the teller who cashed my check. NFCU did not acknowledge receipt of this concern. 

I do not have any direct evidence that any agent of NFCU considered my identity in deciding to hold my check. However, I did verbalize this consideration to the Escalation Department which failed to acknowledge this concern in writing.

That my account was omitted entirely in the response from the Escalation Department is doubly concerning given recent reports that NFCU may be systemically violating federal anti-discrimination laws in its banking practices, as reported in several major media outlets and for which multiple members are Congress are now urging the CFBP to investigate NFCU. Therefore, I will not rule this out as a possible cause, pending more information about other customers to whom NFCU has applied holds on the basis of suspicion to doubt collectibility : https : XXXX XXXX XXXX XXXX XXXX XXXXfederal-credit-union-for-unfair-mortgage-lending-and-hold-lenders-using-algorithmic-scoring-accountable-for-preventing-discrimination/ 5. The check was eventually paid without incident, proving any " confidential information '' alleging the check might not be paid was false.

Whatever reasonable cause that NFCU claimed to believe the check [ was ] uncollectible was meritless. The payor bank paid the full amount as expected, because I had the funds to do so for monthsnot just throughout the lifecycle of the cashiers check. 

Unfortunately, bank statements visible to me do not indicate when exactly the funds were paid. In fact, aside from the email NFCU sent on XX/XX/2023, no record of the hold exists. It appears the funds may have been deposited around Monday XX/XX/2023. 

-- In summary, NFCU is accountable to federal law regarding the deposit of legitimate monies and may not arbitrarily delay funds deposited in its bank without reasonable cause. It is extremely alarming to a customer who has maintained a spotless banking history to suddenly have such a large quantity of funds seized with no explanation or transparency.

I made multiple earnest requests to NFCU agents for an articulation of the cause for the hold on my check, and said agents did not respond in good faith.

I now appeal to the CFPB in hopes of ascertaining the cause for my checks hold, and in lieu of any justifiable explanation, the oversight necessary to ensure customers can take advantage of banking services in the future as guaranteed by federal law.