Consumer complaint received 2026-01-08 00:00:00
Product: Checking or savings account — Checking account
Issue: Problem caused by your funds being low — Late or other fees
Company: NAVY FEDERAL CREDIT UNION
State: AP

Complaint narrative:
ADDENDUM XXXX XXXX CAR PAYMENT MISAPPLICATION & INTERNAL REVERSAL XXXX. ADDITIONAL FINDINGS : IMPROPER INTERNAL REVERSAL OF CAR PAYMENT A. FACTUAL CLARIFICATION ( CRITICAL ) On or about XX/XX/year>, a car payment was successfully transmitted via XXXX XXXX to Navy Federal Credit Union. 

Key facts : The payment was sent to an older Navy Federal account, not my primary checking account The payment was intended solely and expressly for my auto loan Navy Federal received and posted the payment At the time of posting, the receiving account balance was {$0.00} There was no overdraft, no negative balance, and no authorization to reverse Despite this, Navy Federal initiated an internal transfer process that : Removed/ reversed the car payment Internally reallocated the funds Did not return the funds to XXXX XXXX Did not credit the auto loan Was done without authorization or notice As a direct result, Navy Federal now falsely reflects the auto loan as XXXX payments delinquent, even though a valid payment was made. 



B. WHY THIS ACTION IS UNLAWFUL XXXX. Unauthorized Electronic Fund Transfer Reversal Once a consumer-authorized electronic payment is successfully completed, a financial institution may not reverse or reallocate it absent : Consumer authorization, or A valid error-resolution finding under EFTA Applicable law : 15 U.S.C. 1693e ( a ) Electronic fund transfers require authorization 12 C.F.R. 1005.10 ( b ) Prohibits unauthorized EFT reversals 12 C.F.R. 1005.11 Requires investigation before reversing payments No such authorization or investigation occurred. 



XXXX. Improper Internal Setoff at a {$0.00} Balance Navy Federal performed an internal transfer/setoff when the receiving account balance was exactly {$0.00}. 

This is unlawful because : There were no available funds to offset The funds were earmarked for a specific loan obligation Internal setoff can not be used to nullify a designated loan payment Applicable law : 12 U.S.C. 5531 ( UDAAP ) Unfair acts or practices 12 U.S.C. 5536 ( a ) ( 1 ) ( B ) Using internal processes to obtain benefit not entitled to This constitutes an unfair and abusive practice, particularly against a XXXX veteran. 



XXXX. False Delinquency & Credit Harm By removing a valid payment : Navy Federal manufactured an artificial delinquency The account is now shown as XXXX payments behind This exposes me to : Improper interest Fees Credit reporting harm Applicable law : 15 U.S.C. 1681s-2 ( a ) Furnishers must report accurate information 15 U.S.C. 1681 ( b ) Maximum possible accuracy requirement Reporting delinquency after removing a valid payment is inaccurate reporting. 



XXXX. Violation of Loan Crediting Rules Payments must be credited as of the date received and applied to the intended obligation. 

Applicable law : 12 C.F.R. 1026.36 ( c ) ( 1 ) ( Regulation Z / TILA ) Requires prompt and proper crediting of loan payments Navy Federal failed to properly credit the payment. 



XXXX SEPARATION FROM TREASURY FUNDS ( CLARITY FOR REGULATORS ) For avoidance of doubt : This XXXX XXXX car payment is NOT a Treasury or VA payment It is a separate violation It can not be used to justify or offset earlier VA benefit mishandling It demonstrates the same internal control failures XXXX RESULTING DAMAGES Auto loan falsely shown as XXXX payments delinquent Exposure to : Improper late fees Additional interest Credit reporting damage Emotional and financial distress while overseas XXXX. REQUESTED ADDITIONAL REGULATORY RELIEF ( SPECIFIC TO THIS ISSUE ) In addition to prior requests, I request regulators order Navy Federal to : XXXX. Immediately reinstate and credit the XXXX XXXX car payment XXXX. Correct the loan history to reflect payments as current XXXX. Remove all late fees and interest caused by the reversal XXXX. Correct or delete any credit reporting related to this delinquency XXXX. Provide written explanation of the internal transfer authority relied upon XXXX. Cease internal setoff practices without authorization X. LEGAL CONCLUSION Navy Federal Credit Union : Accepted a valid car payment Reversed it internally at a {$0.00} balance Without authorization Without investigation Without notice Then treated the loan as delinquent This conduct violates EFTA, Regulation E, UDAAP, Regulation Z, and FCRA, and further demonstrates systemic internal control failures. 

This is a second or third violation within the last XXXX months by this banking institution.

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