Consumer complaint received 2026-03-06 00:00:00
Product: Checking or savings account — Other banking product or service
Issue: Managing an account — Problem accessing account
Company: PENTAGON FEDERAL CREDIT UNION
State: MD

Complaint narrative:
Subject : Retaliatory Account Restrictions After Filing CFPB Complaint To Whom It May Concern, I am submitting this complaint against PenFed Credit Union for what appears to be retaliatory and unfair treatment of my account after I exercised my right to file a complaint with the Consumer Financial Protection Bureau. On XX/XX/year>, I filed a complaint with the CFPB regarding PenFeds decision to close my debit card immediately before a holiday weekend without notice. The CFPB confirmed that the complaint was transmitted to PenFed on XX/XX/year>. Since that date fell on a XXXX when corporate offices are typically closed, the earliest the credit union would have reasonably reviewed the complaint would have been the following business days. Prior to the CFPB complaint, my checking account had no restrictions. I had full access to move my funds internally and externally without issue. In fact, on XX/XX/year>, I successfully initiated an external transfer through PenFeds system. I later called the credit union myself to cancel that transfer because I realized I had made an error when entering the amount. At that time, there were no warnings, no restrictions, and no indication that my account privileges would be limited. However, on XX/XX/year>, just days after the CFPB transmitted my complaint to PenFed, I attempted to initiate another external transfer from my account. The system suddenly denied the transfer and instructed me to call customer service. This was the first time I had ever experienced such a restriction on my account. When I contacted PenFed, the representative clearly appeared to be reading from a note placed on my account. The representative told me the reason my transfer ability was blocked was because I previously had a PenFed credit card that had been charged off and sent to collections. The representative specifically stated that the bank has the right to do what it wants. This explanation makes little sense and raises serious concerns about retaliation. That credit card was charged off more than a year ago, yet PenFed never restricted my deposit account during that entire time. In fact, after the credit card was charged off, PenFed continued to allow normal use of my accounts. They even issued me a replacement debit card when my prior card had been compromised. At no point during that entire year did PenFed indicate that my checking account privileges would be limited because of the charged-off credit card. Before the credit card was charged off, I had proactively contacted PenFed and explained that I had lost my job due to circumstances involving federal government employment disruptions. I was making smaller payments while I looked for work. When I obtained a new job, I again contacted PenFed and asked to be placed on a payment plan to catch up on the balance. I was told by PenFed that they could not set up a plan because the account had already been sent to collections, and I was instructed to work directly with the collection agency. During that conversation, I specifically asked whether the charged-off credit card would affect my other PenFed accounts. I was told clearly that it would not affect my other accounts and that PenFed generally does not terminate relationships over a charged-off credit card. Based on that representation, I continued maintaining my deposit relationship with PenFed. Now, more than a year later, and immediately after filing a CFPB complaint regarding the debit card issue, PenFed suddenly claims the charged-off credit card is the justification for restricting my transfer ability. The timing strongly suggests the restriction was not a legitimate risk or fraud control, but rather a reaction to my complaint. Additionally, when I asked about notification regarding these restrictions, I was told that the right to take such action is disclosed in the account agreement. However, my account was opened online, and I never received any disclosure documents electronically or by mail explaining that my account could be restricted without notice. It is deeply concerning that : My account operated normally for over a year after the credit card charge-off. PenFed even issued replacement debit cards and allowed full access during that time. Restrictions only appeared immediately after a CFPB complaint was filed. Customer service representatives referenced internal notes indicating the account had been flagged. This pattern strongly suggests that PenFed may have placed restrictions on my account in retaliation for filing a regulatory complaint. Consumers should be able to exercise their right to file complaints with federal regulators without fear of retaliation or interference with their ability to access their own funds. The timing of PenFeds actions raises significant concerns regarding unfair or retaliatory conduct. Financial institutions supervised by federal regulators are prohibited from engaging in unfair, deceptive, or abusive acts or practices ( UDAAP ) under the DoddFrank Wall Street Reform and Consumer Protection Act. In this situation, PenFed allowed my account to function normally for more than a year after the credit card charge-off. The credit union continued to provide debit card services and allowed unrestricted transfers during that entire period. Only after my complaint was transmitted by the Consumer Financial Protection Bureau did PenFed suddenly impose restrictions on my ability to transfer my own funds. This sequence of events suggests that the restriction was not driven by risk management or fraud concerns, but instead may have been imposed as a response to my regulatory complaint. Consumers should be able to exercise their right to seek assistance from regulators without fear that their financial institution will retaliate by restricting access to their accounts or limiting their ability to manage their own funds. If PenFed took adverse action against my account because I filed a complaint, such conduct could undermine the consumer protection framework established by federal law and discourage consumers from reporting legitimate concerns. I respectfully request that the XXXX XXXX XXXX XXXX review whether PenFeds conduct constitutes an unfair or retaliatory practice and whether similar actions may have occurred with other members who filed regulatory complaints. I am also concerned that PenFed may have limited services on my account without complying with the requirements of 12 CFR 701.32, which governs a credit unions ability to limit services to members. This regulation requires that credit unions have legitimate grounds for restricting services and generally provide notice explaining the reason for the limitation. In my case, I was never provided written notice that my transfer privileges would be restricted, nor was any explanation given until I called after the transfer was denied. The explanation provided referenced a credit card charged off more than a year earlier, even though my account had functioned normally during that entire period. The sudden restriction immediately after my CFPB complaint raises concerns that the action may not have been based on legitimate operational or safety reasons. Because this involves blocking your ability to move your own money, regulators may also examine whether PenFed interfered with rights under the Electronic Fund Transfer Act and Regulation E, which govern consumer electronic transfers. While banks can block transactions for fraud reasons, they must still act consistently and fairly, and the restriction must have a legitimate basis.

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