Consumer complaint received 2024-10-16 00:00:00
Product: Credit card — General-purpose credit card or charge card
Issue: Problem when making payments — Problem during payment process
Company: DISCOVER BANK
State: FL

Complaint narrative:
This billing dispute applies to past, present and future certificates of indebtedness issued under the Discover Cardmember Agreement. 

{$1600.00} XXXX XXXX XXXXXX/XX/XXXX ) and {$1800.00} ( XXXX XXXX  ) error To whom this may concern, I have in my possession, the USPS registered mail tracking numbers ( XXXX ) corresponding return receipt with signature confirming my marketable treasury security/due bill sent ( at the time sent valued at {$1600.00} ) from XXXX  XXXX XXXX XXXX Florida XXXX XXXX XX/XX/XXXX at XXXX XXXX, was successfully delivered with a letter of instruction correspondence to XXXX XXXX XXXX at XXXX XXXX on XX/XX/XXXX in XXXX XXXX XXXX Illinois XXXX XXXX a proper place of payment. However, it was not honored. 

Whether it be refusal or destruction of the instrument, either instance would constitute discharge under Article 3 Sections 3-603 and 3-604 of the UCC. Under the Indenture between Discover Card Execution Note Trust ( DCENT ) and XXXX XXXX XXXX Association, Article 3 Section 306. ( b ) also provides procedure to the same effect. Notwithstanding, on page 1 of the Discover Cardmember Agreement under section Making Payments, subsection Payment Instructions it states You must pay in U.S. dollars. Please do not send cash. Sending cash is not allowed. The term cash is not defined under the Agreement, therefore I as the holder in due course can only assume the term is used in reference to Federal reserve notes which according 12 U.S. Code 411, are issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are authorized, thereby prohibiting me as an individual who is not a federal reserve agent from being able to utilize those particular instruments for any purpose. This raises the question of what form of legal tender am I to apply as payment in order to settle the claim?

Before addressing the question it is important first to understand how advances are made to Federal reserve banks. The Federal Reserve Banks XXXX XXXX XXXX. XXXX Effective XX/XX/XXXX, issued by each Reserve Bank, sets forth the terms under which an entity may obtain Advances from, incur Obligations to, or pledge Collateral to a Reserve Bank. Section 3.0 of said XXXX describes how An Advance must be secured by Collateral acceptable to the Bank. Advances can be done via the XXXX XXXX XXXX or by using the XXXX XXXX XXXX XXXX XXXX XXXX online application, where Borrowing entities can submit requests for Advances from and submit Collateral Schedules to the Reserve Banks, and communicate with the Reserve Banks about Advances and pledges of Collateral in accordance with Reserve Banks Operating Circular No. 10. Federal Reserve Act, Section 16 ( 2 ) states that such application shall be accompanied with a tender to the local Federal Reserve agent of collateral in amount equal to the sum of the Federal Reserve notes thus applied for and issued pursuant to such application. The collateral security thus offered shall be acquired under section 10A, 10B, 13, or 13A of the Federal Reserve Act, or purchased under the provisions of section 14 of said Act.

Generally, according to the official interpretation of 12 CFR Part 1002.7 ( d ) ( 4 ), a signature to make the secured property available is needed on a security agreement as a Bank may also require the Borrower to execute a promissory note and/or documents or additional relevant agreements such as the Discover Cardmember agreement at any time including after each statement date with respect to an Advance, and I am of sufficient age and competency to understand the act of indorsing and giving receipt. I have invested into Discover by way of my application which is a promissory note because it is a signed document that is transferrable to 3rd parties and also promises a sum of payment. My deposit account with Discover also qualifies as an investment in the company. As discussed in the Discover prospectus, the credit card statement with attached payment coupon is in fact a class A definitive note issue representing principal charges and finance charges and other fees in an account designated for the master trust. By way of my signature, and not federal reserve notes the use of which I am prohibited, I have given the instrument marketable value where it can and will eventually be traded on the secondary market as Discover Bank is obligated to transfer these receivables to the depositor for subsequent transfer to the master trust on an ongoing basis for permitted investment purposes through what is described as a securitization transaction. Treasury Department XXXX XXXX. XXXX, Revised XX/XX/XXXX, also embodies regulations governing the Indorsement and Payment of Checks Drawn on the Treasurer of the United States for which the Federal Reserve serves as fiscal agent. As for transfers of assets in securitizations, the FDIC has not provided guidance on how to bring transfers to the master trust or the note issuance trust within alternative safe harbors for entities that do not meet the conditions of XXXX CFR XXXX ( d ) ( XXXX ). Furthermore, XXXX has previously declined to provide safe harbor protection for remuneration exchanged between wholly-owned entities, including parent entities and their wholly-owned subsidiaries. So while the parties involed intend to treat the transaction as a true sale as articulated in the prospectus, that premise stands in direct contrast to Article XXXX XXXX XXXX under the Indenture where it states ; Election Under Delaware Asset-Backed Securities Facilitation Act. Without limiting any other provisions of this Indenture or any Indenture Supplement, the parties hereto agree that ( a ) the transactions contemplated hereby constitute a securitization transaction. The re-characterization from a secured financing transaction in XXXX agreement to a true sale in the another for accounting purposes, is not only misleading, but it challenges the exemptions relied upon in any Volcher rule considerations as well as safe harbor which any resale of notes must be made in accordance with since the securitization transaction on its face is what would be construed by any governmental agency or instrumentality as the operation of a covered fund under Section 13 of the Bank Holding Company Act of XXXX or an investment company under Section 3 or 17 CFR 270.3a-7 of the Investment Company Act of 1940. This suggests Discover Banks involvement in secondary markets rely heavily on the perpetual manipulation of regulatory requirements if not outright securities fraud, e.g. The XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 

According to XXXX XXXX XXXX Congress, Session I, XXXX  XXXX, XX/XX/XXXX, XXXX, XXXX ; every provision contained in or made with respect to any obligation which purports to give the obligee a right to require payment in gold or a particular kind of coin or currency, or in an amount in money of the United States measured thereby, is declared to be against public policy ; and no such provision shall be contained in or made with respect to any obligation hereafter incurred. Every obligation, heretofore or hereafter incurred, whether or not any such provision is contained therein or made with respect thereto, shall be discharged upon payment, dollar for dollar, in any coin or currency which at the time of payment is legal tender for public and private debts. A due bill check as defined by FINRA Rule 11630 ( e ) under the Uniform Practice code is also a debt instrument that meets the mandate of Federal Reserve Act Section 16 ( 1 ) redeemable in lawful money on demand at the Treasury Department of the United States, in the city of Washington , District of Columbia, or at any Federal Reserve bank. 18 U.S. Code 8 defines the term obligation or other security of the United States to include all bonds, certificates of indebtedness, national bank currency , Federal Reserve notes, Federal Reserve bank notes, coupons, United States notes, Treasury notes, gold certificates, silver certificates, fractional notes, certificates of deposit, bills, checks, or drafts for money, drawn by or upon authorized officers of the United States, stamps and other representatives of value, of whatever denomination, issued under any Act of Congress, and canceled United States stamps. 

At any rate, as a result of XXXX XXXX XXXX XXXX, XXXX XXXX, and from that day forward ( XX/XX/XXXX ), no one has been able to lawfully pay a debt or lawfully own anything. The only thing one can do is tender credit in exchange of debts, with the debt being perpetual. The suspension of the gold standard, and prohibition against paying debts, removed the substance for our common law to operate on, and created a void as far as the law is concerned. This substance was replaced with a XXXX XXXX XXXX XXXX where debt is XXXX XXXX money. XXXX  XXXX was implemented immediately. The day after President XXXX signed the resolution, the treasury offered the public new government securities, minus the traditional payable in gold clause. 192 states that one can not demand a certain form of currency that they want to receive if it is dollar for dollar. In consideration that only XXXX XXXX exists in circulation with which to discharge debt ; and in order to facilitate lawful commercial transactions ; and in order to lawfully engage in commerce understanding the indenture trustee for Discover may only invest funds on deposit in any investor account in Permitted Investments ( See Sources of Funds to Pay the Notes General, and Limited Recourse to XXXX ; Security for the Notes under the prospectus )XXXX XXXX XXXX XXXX, shall tender with special indorsement, negotiable instruments or securities represented by instruments in registered form which evidence : ( a ) obligations issued or fully guaranteed, as to timely payment, by the United States of America or any instrumentality or agency of the United States of America, when those obligations are backed by the full faith and credit of the United States of America ; ( d ) investments in money market funds having the Highest Rating ; in adherence to public policy where as a result of my signature, an instrument becomes investment grade qualifying under at least 4 categories of issuers and acceptable securities/collateral for the 31 CFR Part 202 program.

Now turning your attention back to addressing the question of what form of legal tender am I to apply as payment in order to settle the claim as an individual not authorized to use cash? Section : Making Payments subsection : Payment Instructions under the Discover Cardmember Agreement provides that All checks must be drawn on funds on deposit in the U.S.We can accept late payments, partial payments or payments marked payment in full or with any other restrictive endorsement without losing any of our rights under this Agreement. Therefore in order to remain in compliance both contractually and lawfully, XXXX XXXX M, against whom a claim is asserted, in good faith tendered a debt instrument/security with special indorsement to the claimant as full satisfaction of the claim for statement cycle XX/XX/XXXXXXXX XXXX  pursuant to UCC 3-311 and 8-509 ( XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX ) and Article III Section 309. Cancellation under the Indenture between Discover Card Execution Note Trust and XXXX XXXX XXXX XXXX dated XX/XX/XXXX which states, all Notes surrendered for payment, redemption, transfer, conversion or exchange will be cancelled by the Indenture Trustee, and, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee and, if not already canceled, will be promptly canceled by it. Although Discover is not necessarily obligated to accept the tendered payment, the specific act of tendering the payment absolves the debt pursuant to Article 3 Sections 3-603 and 3-604 under the UCC.

Also, Discover in their own words under section : Making Payments, subsection : Payment Instructions of the Discover Cardmember Agreement, presumably pursuant to 15 U.S. Code 1666d - Treatment of credit balances, state We credit your payments in accordance with the terms contained on your billing statement. Thus as directed, we then turn to page 2 of the billing statement under section Credit Balances where it very plainly states the following, If your Account has a credit balance, the amount is shown on the front of your billing statement. A credit balance is money that is owed to you.We will send you a refund of any remaining balance of {$1.00} or more after 6 months, or as otherwise required by applicable law, or upon request made to the address in the Contact Us section on page 3 of your billing statement. As such, a request was made and it is my understanding that payments take 1-3 days to post to my account and show as available credit however, Discover did not promptly credit my account, via the Electronic Fund Transfer Act, the allocation of principal and interest accrued thereon from my payment coupon. Furthermore, at the top of page 2 under How We Apply Payments ' of the same section, it states very plainly, " In all cases, we will apply payments and credits as required by applicable law. '' If that is indeed the case, then subsequent to my tender with special indorsement, the definitive security of which I am the holder in due course, after being correctly sent to XXXX XXXX XXXX at XXXX XXXX  on XX/XX/XXXX in XXXX XXXX, Illinois XXXX, the address designated to receive payment with correspondence in an envelope other than the one provided as per the Discover Cardmember Agreement, should have been converted to a book-entry security as collateral to secure funds of the United States . My account has yet to reflect the settlement of this transaction, therefore an investigation is warranted.

Company response to consumer: Closed with non-monetary relief