Consumer complaint received 2025-12-02 00:00:00
Product: Checking or savings account — Checking account
Issue: Managing an account — Deposits and withdrawals
Company: NAVY FEDERAL CREDIT UNION
State: NY

Complaint narrative:
I am a XXXX veteran whose VA disability benefits were repeatedly frozen, withheld, or restrained by Navy Federal Credit Union for more than a year without proper documentation, legal basis, or required disclosures. These actions caused severe financial harm, credit damage, housing instability, and loss of medical care for my service dog.

1. Account Freeze Without Notice ( XXXX XXXX ) Around XX/XX/XXXX, Navy Federal suddenly froze my checking account without any warning. I discovered the freeze when a friend attempted to withdraw {$95.00} for me and the ATM showed {$0.00} available balance. I had not used the card, and Navy Federal gave me no notice, no explanation, and no documentation.

2. Illegal Extended Hold on Garnishment XXXX ( {$9200.00} ) Navy Federal held a child-support garnishment ( XXXX ) for well beyond the 12-month legal limit, even though my account had more than enough funds to satisfy the order.

I repeatedly requested documentation on XX/XX/XXXX and XX/XX/XXXX. 

They refused to provide it.

Navy Federal did not release this expired hold until XX/XX/XXXX, only after I cited federal and state law.

3. After Dropping the Expired Hold, Navy Federal Applied a New Double-Hold Immediately after releasing the expired order, Navy Federal applied an internal double-hold policy to the remaining XXXX  restraint, even though I had enough funds to cover it. This prevented my XX/XX/XXXX deposit from being available, despite the expired restraint being cleared.

4. Withheld VA Disability Funds ( Protected Income ) For long periods, Navy Federal restricted or withheld my VA disability benefits, which are protected under : 38 U.S.C. 5301 31 C.F.R. Part 212 These funds were not supposed to be frozen or restricted in this manner.

5. Requested Information Not Provided I repeatedly requested : Copies of all garnishment documents and logs Dates holds were applied/removed Policies authorizing the holds Accounting showing how much was remitted Exemption forms A named compliance officer Navy Federal has not provided any of this.

6. Inaccurate Arrears Calculations On XX/XX/XXXX, I received official XXXX XXXX documents showing a different ( lower ) arrears amount than what Navy Federal claimed. Navy Federal used an inflated internal figure without validating it against state records.

7. Multiple Missed Deadlines & No Callbacks In writing ( emails dated XX/XX/XXXX, XX/XX/XXXX, and XX/XX/XXXX ), I asked for : A compliance officer Receipt confirmation Documentation Navy Federal promised callbacks on XX/XX/XXXX and XX/XX/XXXX but never called back.

8. Financial & Personal Harm Caused Because Navy Federal froze my account and withheld my deposits for over a year : My credit was severely damaged due to delinquent payments I could not make.

I became unable to pay rent, insurance, and essential bills.

I lost housing stability and had to move in with my elderly mother, causing her financial hardship. 

I could not pay for XXXX tests or treatment for my service dog, who passed away on XX/XX/XXXX as a result.

I was unable to pay child support during multiple months due to the illegal holds, worsening my legal and financial situation.

9. Current Status Navy Federal eventually released the expired {$9200.00} hold, but I believe there is still a remaining improper hold, and I still have not received documentation, accounting, or the records I requested.

Relief Requested Full documentation of all holds and remittances Written accounting of every frozen deposit Confirmation of which funds were remitted Removal of remaining improper restraints Restitution for funds frozen beyond the legal limit Investigation into policy violations affecting protected VA benefits

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