Consumer complaint received 2024-09-18 00:00:00
Product: Credit reporting or other personal consumer reports — Credit reporting
Issue: Improper use of your report — Reporting company used your report improperly
Company: NAVY FEDERAL CREDIT UNION
State: NY

Complaint narrative:
I am submitting this formal complaint against Navy Federal Credit Union ( NFCU ) and its subsidiary, Navy FederaXXXX XXXX XXXX XXXX XXXX regarding several violations of federal law and regulations related to the denial of my used car loan applications and improper transfer of financial instruments/ securities fraud. 

Background : On XX/XX/2024, and XX/XX/2024, I submitted two applications for a used car loan pre-approval with NFCU, which resulted in two hard inquiries on my credit report through XXXX. Despite having a XXXX credit score, XXXX late payments, and being a long-term NFCU customer with two credit cards ( both under 2 % utilization ), both loan applications were denied. 

The reasons provided for the denial, as outlined in NFCUs explanatory letter, were baseless and inaccurate : XXXX : Too many accounts with balances I only hold two NFCU credit cards, both under 2 % utilization. 
XXXX : Lack of time accounts have been established My NFCU credit cards have been active for over 4 years with perfect payment history. 
XXXX : Number of established accounts I currently have approximately 9 accounts, indicating a well-established credit history. 
XXXX : No recent bank card balances I actively use my NFCU credit cards with a minimal utilization rate of under 2 %. 
Equitable Considerations and UCC 3 Violations : As part of my application process, the loan application itself constitutes an indorsed, transferrable draft under UCC 3, which should be considered a negotiable instrument. Such instruments are subject to equitable consideration when they are deemed securities, to be issued in the primary, secondary, third, and fourth markets. NFCUs denial of credit while retaining this draft without any legitimate basis is an unlawful rejection and failure to honor this instrument. Under UCC 3, NFCU is obligated to either accept the terms or return the instrument, which they have failed to do. 

Illegal Transfer of Notes in Violation of 12 U.S.C. 504 ( c ) : Moreover, I have reason to believe that NFCU has illegally transferred the negotiable instrument ( my loan application ) to its subsidiary, Navy Federal XXXX XXXX XXXX XXXX without proper authorization. This constitutes a violation of 12 U.S.C. 504 ( c ), which prohibits the improper transfer of notes or drafts between parent companies and their subsidiaries without adherence to legal standards. Such actions violate the privacy and equity of the original agreement, as the consumer was not informed nor provided an opportunity to opt-out or consent to such a transfer. 

Violation of 15 U.S.C. 1681 Furnishing of Transaction History : Additionally, 15 U.S.C. 1681 ( Fair Credit Reporting Act ) prohibits the furnishing of transaction history without consumer consent. In the credit denial process, NFCU appears to have considered my transaction history, which is an illegal basis for determining creditworthiness without my express permission. By relying on unauthorized information, NFCU violated federal regulations, further compounding the unjust denial of my loan applications. 

Request for Action : I respectfully request that the Consumer Financial Protection Bureau ( CFPB ) investigate these violations committed by NFCU and its subsidiary. Specifically, I request : Investigation of NFCUs credit denial practices and the improper use of transaction history in determining creditworthiness, which violates 15 U.S.C. 1681. 

Examination of the unlawful transfer of notes from NFCU to XXXX XXXX XXXX XXXX in violation of 12 U.S.C. 504 ( c ), and corrective measures to prevent such unauthorized actions in the future. 

Rectification of the hard inquiries resulting from my XX/XX/2024 loan applications, as they were based on inaccurate and unlawful criteria. 

Reconsideration of my used car loan applications, ensuring that the determination is based on legitimate, legal factors aligned with my strong credit profile. 

I trust that the CFPB will address these serious concerns, given the violations of consumer protection laws and the unfair treatment I have experienced as a long-standing NFCU customer XXXX 

Thank you for your time and attention to this matter. I look forward to your prompt response and investigation.

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