Consumer complaint received 2025-07-21 00:00:00
Product: Credit card — General-purpose credit card or charge card
Issue: Closing your account — Company closed your account
Company: First Technology Federal Credit Union
State: MN

Complaint narrative:
CFPB Complaint - FirstTech Federal Credit Union Subject : Complaint Regarding Arbitrary Account Closure, Denial of Hardship Relief, Withholding of Earned Rewards, and Severe Impact on Credit Score and Available Credit Institution Address : First Tech Federal Credit Union Credit Card Correspondence XXXX XXXX XXXX XXXXXXXX, OR XXXX Headquarters / Legal Department : Attn : General Counsel XXXX XXXX XXXX XXXX XXXX XXXX CA XXXX Corporate Headquarters ( Operations ) : XXXX XXXX XXXX XXXX XXXX XXXX XXXX OR XXXX Product : Credit Card Account Ending : XXXX XX/XX/XXXX WITHOUT PREJUDICE To Whom It May Concern at the Consumer Financial Protection Bureau : This formal complaint is submitted regarding First Tech Federal Credit Unions ( FirstTech ) handling of my credit card account ending in XXXX XXXXXXXX. Their conduct includes : 1. The arbitrary and unexplained closure of a well-managed account ; 2. Repeated denial of hardship relief despite clear documentation of financial distress ; 3. The unlawful withholding of earned rewards ; and 4. Substantial negative consequences to my credit and financial profile as a direct result of these actions.

1. Chronology and Factual Background On XX/XX/XXXX, my FirstTech Credit Card account ending on XXXX XXXXXXXX had an available Credit Limit of {$27000.00} ( Exhibit 1 ) and a history of on-time payments since its opening date on XX/XX/XXXX as stated in a XX/XX/XXXX XXXX  Credit Report ( Exhibit 29 ). 
On XX/XX/XXXX, I received an adverse action letter from FirstTech ( Exhibit 2 ) stating that my credit card account was being closed due to " delinquent credit obligations with others. '' The letter referenced XXXX  but provided no specific account details or derogatory entries. According to XXXX credit file records ( Exhibit 16 ), however, the account was not closed until XX/XX/XXXX, indicating that the XX/XX/XXXX notice was premature and inaccurate, in violation of 12 C.F.R. 1002.9 ( a ) ( 1 ) ( iii ), which requires creditors to issue truthful and timely notice of any adverse action taken on an existing account. This aligned with my FirstTech Credit Card Statement from XX/XX/XXXX ( Exhibit 4 ) which shows {$0.00} in available credit. 
On XX/XX/XXXX, I submitted a written inquiry through the FirstTech Message Center ( Exhibit 3 ) questioning the basis of the closure and clarifying that I had only experienced a temporary overdraft of one day on one unrelated XXXX XXXX account, which had already been resolved. In that message, I also expressed surprise given my long-standing positive relationship with the institution and requested reconsideration. 
On XX/XX/XXXX ( Exhibit 3 ), FirstTech replied not by confirming the XX/XX/XXXX claim of delinquency, but instead offered an entirely different rationale : that the account had been closed as a result of a periodic credit score and account performance review. No mention of delinquency or XXXX  was made. This contradiction directly undermined the factual integrity of the original adverse action letter. 
Then, on XX/XX/XXXX, FirstTech sent a new letter consisting of two pages with conflicting adverse action letters ( Exhibit 5 ). The first page stated that the XXXX notice had included an incorrect adverse action reason and replaced it with a policy-based explanation citing FICO scores below XXXX and institutional cost pressures. The second page of the XX/XX/XXXX letter offered a generic list of credit factors : such as high utilization, short credit history, and recent inquiries, without citing any specific credit report entries. These justifications also referenced an outdated XXXX  XXXX score from XX/XX/XXXX, raising further questions as to the timing, accuracy, and procedural integrity of the decision. 
The existence of three adverse action letters over two months, each citing a different reason, with contradictory factual timelines, reflects not only a failure to comply with Regulation B, but a lack of transparency, accountability, and procedural fairness.

2. Cascading Credit Damage and Denied Relief 2.1. Available Credit Reduction Impact The abrupt closure of this account triggered a sequence of negative financial events. FirstTechs action resulted in an immediate reduction in my available credit in the amount of {$35000.00}, from {$160000.00} ( Exhibit 17 ) down to {$130000.00} ( Exhibit 18 ) within XX/XX/XXXX to XX/XX/XXXX ( 42 days ), which in turn spiked my utilization ratio from 37 % ( which is considered by Credit Reporting Agencies like XXXX, XXXX  and XXXX  to be within the fair or okay range up to 54 % ( which is considered by Credit Reporting Agencies to fall into the high or high-risk zone ). 

This appears to have prompted other creditors to close unrelated accounts, despite my continued good standing. These include : 2.2. Credit Limit Closures Cascade : FirstTech XXXX {$27000.00} - Closed XX/XX/XXXX ( Exhibit 1 and Exhibit 16 ) XXXX - {$8500.00} - Closed XX/XX/XXXX ( Exhibit 31 and Exhibit 32 ) XXXX - {$6000.00} - Closed XX/XX/XXXX ( Exhibit 33 and Exhibit 34 ) XXXX  {$1000.00} - Closed XX/XX/XXXX ( Exhibit 35 and Exhibit 36 ) XXXX ( XXXX XXXX ) - {$5500.00} Closed XX/XX/XXXX ( Exhibit 37 and Exhibit 38 ) XXXX XXXX XXXX - {$7500.00} - Closed XX/XX/XXXX ( Exhibit 39 and Exhibit 40 ) o Total Credit Limit Lost : {$55000.00} 2.3. Denied Relief During and After Unemployment Due to financial hardship during my unemployment time from XX/XX/XXXX to XX/XX/XXXX ( Exhibit 6 ), I had to rely on usage of credit cards, use of funds from 401k, IRA and other savings to comply with minimum payments which led to an increase to 79 % in my utilization ratio by XX/XX/XXXX ( Exhibit 28 ), and a further decrease in score by XX/XX/XXXX ( Exhibit 41 ) with an increase in utilization ratio of 96 % during the effort to stabilize my finances ( see Section 2.4 ). 

On XX/XX/XXXX, XX/XX/XXXX, and XX/XX/XXXX, two months after starting a new job and having exhausted my whole 401k and Roth IRA to meet my obligations, I submitted multiple internal requests for assistance via FirstTechs secure Message Center ( Exhibit 8 and Exhibit 9 ). I proposed reduced payments, interest-only periods, or structured hardship plans. My efforts were met with generic replies and refusals to communicate in writing, despite my clear request for secure written documentation due to work constraints.

2.4. Ongoing Credit Recovery Attempts and Lingering Damage After securing new employment in XX/XX/XXXX, I initiated an effort to stabilize my finances and recover from the damage caused by the abrupt account closure. However, the elevated interest rates on my remaining credit obligations, particularly on the closed FirstTech account, severely limited my monthly cash flow and made it difficult to regain financial balance. In an attempt to improve my credit utilization and rebuild my profile, I sought additional tradelines through services such as XXXX, XXXX, XXXX, XXXX, XXXX, XXXX, among others and focused on responsible use of the limited revolving credit still available to me. These efforts produced only minimal improvements and did not replace the high-limit revolving capacity that had previously supported my financial stability.

My XXXX credit score fell from XXXX to XXXX between XX/XX/XXXX ( Exhibit 17 ) and XX/XX/XXXX ( Exhibit 41 ), primarily due to increased utilization following the closure of my {$27000.00} FirstTech account and the subsequent loss of {$55000.00} in total revolving credit capacity across multiple institutions. To quantify the impact of this cascade, I used multiple score simulators. 

At XXXX XXXX XXXX XXXX, which uses the XXXX  VantageScore 3.0 model, paying down {$55000.00} in balances ( Exhibit 46 ) resulted in a XXXX-point increase ( XXXX  to XXXX  ). Increasing credit limits by the same amount ( Exhibit 47 ) produced a smaller XXXX-point increase ( XXXX  to XXXX  ). When both actions were simulated together ( Exhibit 48 ), the score rose XXXX points ( XXXX to XXXX ), confirming that utilization ratio is the driving factor in score suppression.

Separately, I used the Experian FICO Score Simulator, where a {$55000.00} paydown ( Exhibit 49 ) generated a XXXX-point increase ( XXXX to XXXX ), and a {$35000.00} credit limit increase ( the simulators maximum allowed input ) generated a XXXX-point increase ( XXXX to XXXX ) ( Exhibit 50 ). 

These simulations consistently show that restoring revolving credit capacity significantly improves credit scores. Had FirstTech maintained my account in good standing, my utilization ratio would have remained under 30 percent. Based on typical scoring behavior and these independently generated simulations, my credit score would have reasonably remained near XXXX. In fact, this estimate may be conservative. If the FirstTech account had remained active, I likely would have qualified for lower-interest loans, improved consolidation offers, and lower monthly outflows on other obligations. This would have accelerated my ability to reduce balances across other accounts, further improving utilization and credit score. Instead, I was repeatedly denied credit or offered loan terms exceeding 26 percent APR, leaving me trapped in a compounding cycle of suppressed score, denied access, and punitive interest, all stemming from FirstTechs unilateral closure during my financial recovery.

Although my credit score has gradually improved, the damage caused by FirstTechs actions remains the primary obstacle to recovery. My credit report still reflects elevated utilization, significantly reduced available credit, and multiple closed accounts that signal increased risk to lenders. This situation continues to block access to affordable credit, hinder debt restructuring efforts, and trap me in a financially unsustainable cycle that began with FirstTechs decision and their continued refusal to provide any remedy.

This continuous damage over the months was reflected as follows : 2.4.1. XXXX  Credit Score Damage XXXX  Credit Score XX/XX/XXXX XXXX ( Exhibit 17 ) XXXX  Credit Score XX/XX/XXXX XXXX ( Exhibit 18 ) XXXX  Credit Score XX/XX/XXXX XXXX ( Exhibit 19 ) XXXX  Credit Score XX/XX/XXXX XXXX ( Exhibit 20 ) XXXX  Credit Score XX/XX/XXXX XXXX ( Exhibit 41 ) XXXX  Credit Score XX/XX/XXXX XXXX ( Exhibit 23 ) XXXX  Credit Score XX/XX/XXXX XXXX ( Exhibit 26 ) XXXX  Credit Score XX/XX/XXXX XXXX ( Exhibit 27 ) 2.4.2. XXXX  Credit Score Damage : XXXX  Credit Score XX/XX/XXXX XXXX ( Exhibit 21 ) XXXX  Credit Score XX/XX/XXXX XXXX ( Exhibit 42 ) XXXX  Credit Score XX/XX/XXXX XXXX ( Exhibit 24 ) XXXX  Credit Score XX/XX/XXXX XXXX ( Exhibit 44 ) 2.4.3. XXXX  Credit Scores Damage XXXX  Credit Score XX/XX/XXXX XXXX ( Exhibit 22 ) XXXX  Credit Score XX/XX/XXXX XXXX ( Exhibit 43 ) XXXX  Credit Score XX/XX/XXXX XXXX ( Exhibit 25 ) XXXX  Credit Score XX/XX/XXXX XXXX ( Exhibit 45 ) 3. Rewards Points Withheld Without Justification As of early XXXX, I had accrued XXXX rewards points with an approximate cash value of {$370.00} ( Exhibit 30 page 3 ). Due to my inability to meet the minimum payment on FirstTechs account on XX/XX/XXXX, I immediately attempted to redeem these points in order to meet my payment obligation. FirstTech told me to contact FirstTechs designated vendor, XXXX. At FirstTechs instruction ( Exhibit 10 ), I contacted XXXX directly ( Exhibit 11 ), but was informed that my account no longer appeared in their system. I then followed up with FirstTech multiple times to request resolution, as documented in Exhibit 10. In XX/XX/XXXX, FirstTech confirmed that the rewards had been forfeited due to account closure. 

At no time was I advised verbally, in writing, or through the cardholder agreement that closure of the account would result in automatic forfeiture of accrued rewards. These points had already been earned through completed transactions and constituted a valid, vested asset. FirstTechs refusal to release the rewards value constitutes unjust enrichment and may violate disclosure obligations under federal consumer protection law.

4. Additional Misconduct I was also forced to repeatedly demand access to basic account documentation ( Exhibit 12 ). My Message Center history disappeared from the online portal after XX/XX/XXXX, despite multiple communications occurring before that date. Only after escalating my request did FirstTech reissue the full message history and adverse action notice in XX/XX/XXXX ( Exhibit 08 ). 

On XX/XX/XXXX and XXXX, XXXX, I again submitted a structured hardship proposal including a reduced APR of 9 %, interest-only payment options, and a formal plan for resolution. I received no viable offer ( Exhibit 13 ). 

On XX/XX/XXXX, FirstTech granted a 2-month payment deferral ( XXXX XXXX ), requiring payments to resume on XX/XX/XXXX ( Exhibit 14 and Exhibit 15 ). This deferral was appreciated but did not address the broader financial harm already incurred.

5. Legal Violations 5.1. Ongoing Demand for Interest Without Service FirstTech is currently requiring monthly payments at an interest rate of 15.90 percent ( Protected Purchase Balance ) and 18.00 percent ( Purchases ) with a minimum payment of 2 percent of the balance ( Exhibit 30 ). At the same time, they are providing no functional service. The account is closed. No credit card is active or accessible. No available credit is being reported to the credit bureaus. This damages my credit utilization ratio and overall score. If I stop payments to prioritize other active credit lines, my score will be further harmed. FirstTech is benefiting from interest and repayment obligations while denying all consumer-facing services. This arrangement is one-sided, predatory, and unsustainable.

This conduct violates several consumer protection laws and regulatory obligations : 5.2. Truth in Lending Act ( TILA ) Regulation Z, 12 CFR 1026.9 ( c ) ( 2 ) This regulation requires a creditor to provide written notice of any significant change in account terms affecting open-end credit plans, including credit cards, at least 45 days prior to the effective date. A significant change includes a change to the APR, minimum payment, or repayment structure. The notice must include clear tabular formatting and a summary of the consumers right to reject the changes.

5.2.1. While FirstTech issued a letter dated XX/XX/XXXX ( Exhibit 2 ), that referenced closure of the account, this letter failed to satisfy the requirements of 12 CFR 1026.9 ( c ) ( 2 ). It did not disclose any changes to repayment structure, failed to present APR terms or minimum payment requirements, included no tabular disclosure, and omitted any explanation of the consumers right to reject or respond. In addition, it relied on inaccurate and conflicting justifications, later contradicted by FirstTechs own subsequent letters ( Exhibit 5 ). Despite materially altering the credit relationship, FirstTech provided no compliant change-in-terms of disclosure and continued charging 15.90 % and 18.00 % interest while requiring 2 % minimum payments on a closed account, absent informed consent.

5.2.2. FirstTech failed to comply with : 5.2.2.1. 1026.9 ( c ) ( 2 ) ( ii ) : Disclosure of changes to APR and repayment terms 5.2.2.2. 1026.9 ( c ) ( 2 ) ( iv ) : Proper formatting and consumer rights disclosure 5.2.2.3. 1026.9 ( c ) ( 2 ) ( v ) : Exceptions do not apply, as this was not a delinquency-based suspension The failure to notify me of these material changes is a direct violation of Regulation Z and deprives me of informed consent to the continued charges and obligations on a functionally closed account.

5.3. Consumer Financial Protection Act - UDAAP Provisions, 12 U.S.C. 5531 Section 5531 ( a ) grants the Consumer Financial Protection Bureau authority to prevent any covered entity from engaging in unfair, deceptive, or abusive acts or practices ( UDAAP ).

5.3.1. Under subsection ( c ), an act is unfair if it causes or is likely to cause substantial injury to consumers which is not reasonably avoidable.

5.3.2. Under subsection ( d ), an act is abusive if it materially interferes with a consumers understanding of terms, or takes unreasonable advantage of a consumers lack of understanding, inability to protect their interests, or reasonable reliance on the institution.

FirstTechs practice of demanding interest payments while providing no card access, no credit reporting benefits, and no explanation for closure constitutes both unfair and abusive conduct. It interferes with the understanding of the credit obligation, and takes advantage of the imbalance of power and information between consumer and creditor.

5.4. Fair Credit Billing Act ( FCBA ) The continued imposition of interest charges on a closed credit account that provides no access, functionality, or consumer-facing benefit constitutes an unlawful billing practice under the Fair Credit Billing Act. Once closed, the account no longer operates as an open-end credit plan within the meaning of 12 CFR 1026.2 ( a ) ( 20 ), yet FirstTech continues to assess finance charges as if the account were active and accessible.

5.4.1. Under 15 U.S.C. 1666 ( a ), a creditor must investigate and correct billing errors, including charges not properly imposed. A billing error includes the imposition of a charge for a transaction or service that was never rendered or that the consumer has no ongoing ability to access. By continuing to assess interest on a closed account with no credit availability or usage, FirstTech is in ongoing violation of its duty to ensure fair and accurate billing practices under the FCBA and its implementing Regulation Z ( Subpart B ).

5.5. CFPB Supervision and Examination Manual - Credit Card Account Management 5.5.1. Section IV ( A ) ( 1 ) : Account Closures and Restrictions. Institutions must provide timely and clear notice of account closures and base decisions on reasonable criteria. FirstTech failed to do both.

5.5.2. Section IV ( A ) ( 4 ) : Unfair, Deceptive, or Abusive Acts or Practices ( UDAAP ). Servicing closed accounts with high interest while denying all benefits and access constitutes consumer harm.

5.5.3. Section IV ( B ) ( 2 ) : Hardship Programs and Account Assistance. Creditors are expected to offer consistent and reasonable hardship options. FirstTech ignored multiple hardship requests without rationale.

5.5.4. Section IV ( A ) ( 5 ) : Credit Bureau Reporting. Reporting must be accurate and not misleading. Reporting a closed, high-limit account without delinquency damaged my credit score and may constitute a violation.

This pattern of behavior reveals a systemic disregard for regulatory compliance, transparency, and fairness.

5.6. Equal Credit Opportunity Act ( ECOA ) - 12 CFR 1002.9 This regulation requires creditors to issue timely and specific adverse action notices when closing or reducing access to existing credit accounts.

5.6.1. Under 12 C.F.R. 1002.9 ( a ) ( 1 ) ( iii ), a creditor must notify a consumer of adverse action within 30 days of taking such action, and that notice must accurately describe the action taken. FirstTech issued an adverse action notice dated XX/XX/XXXX ( Exhibit 2 ), stating that my credit card account had already been closed due to delinquent credit obligations with others. However, XXXX records confirm that the account remained open until XX/XX/XXXX ( Exhibit 16 ), nearly three weeks after the date of the notice. 

This discrepancy shows the XXXX notice was either premature, inaccurate, or both, and therefore fails to satisfy the legal standard for timely and truthful consumer notification.

5.6.2. Compounding this error, FirstTech later issued two additional adverse action letters on XX/XX/XXXX ( Exhibit 5 ), each contradicting the original. One letter acknowledged that the XX/XX/XXXX4 notice ( Exhibit 2 ) had contained an incorrect adverse action reason, and instead cited a FICO score below XXXX and an internal policy affecting similarly situated accounts ( Exhibit 5 page 1 ). The second letter cited entirely different credit factors, such as high utilization, limited credit history, and excessive inquiries, without referencing the earlier delinquency claim ( Exhibit 5 page 2 ).

5.6.3. The issuance of three conflicting notices over two months, each citing a different rationale, reflects a breakdown in compliance with both the timing requirement under 1002.9 ( a ) ( 1 ) ( iii ) and the specificity requirement under 1002.9 ( b ) ( 2 ). These procedural failures constitute direct violations of the Equal Credit Opportunity Act ( ECOA ), 15 U.S.C. 1691 ( d ), and its implementing regulation, Regulation B.

5.6.4. Under 1002.9 ( a ) ( 2 ), the notice must be in writing and must include the action taken, the name and address of the creditor, a statement of rights under ECOA, and either the specific reasons for the adverse action or the consumers right to request them within 60 days.

5.6.5. FirstTech provided no such written notice, no rationale, and no reference to any consumer rights.

5.6.6. Under 1002.9 ( b ) ( 2 ), if reasons are given, they must be specific. Generic references such as internal policy are insufficient. FirstTech gave no explanation whatsoever.

5.6.7. Under 1002.9 ( b ) ( 1 ), the adverse action notice must include a required ECOA disclosure to inform the consumer of their rights and enforcement agency. This was never provided.

The closure of a {$27000.00} credit line without delinquency, without notice, and without explanation deprived me of any ability to respond or prepare. This is a direct violation of ECOA Regulation B.

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