Consumer complaint received 2023-12-27 00:00:00
Product: Credit card — General-purpose credit card or charge card
Issue: Closing your account — Company closed your account
Company: CAPITAL ONE FINANCIAL CORPORATION
State: GA

Complaint narrative:
On XX/XX/XXXX I endorsed my coupon and sent it in to them. Two weeks later after they received it my account was closed and restricted. This complaint arises from Capital One breach of contract, unjust enrichment, and violation of the Uniform Commercial Code ( U.C.C. ) in relation to a negotiable instrument, specifically a coupon note, which I issued but subsequently refused to honor. I entered into a financial agreement with [ Capital One ]. As part of this agreement, they issued to me a Bond Statement and a coupon note. These are recognized as negotiable instruments under U.C.C. Article 3. Blacks Law Dictionary 6th edition defines : Coupon notes- Promissory notes with coupons attached, the coupons being notes for interest written at the bottom of the principal note. Coupons- They are written contracts for the payment of a definite sum of money. They are deemed negotiable and distinct promises. This is supported by Thompson V. Perrine, 106 U.S. 589, 1 S.Ct. 564, 27 L.Ed. 298. Relying on this established interpretation and precedent, I sought to enforce this coupon note through endorsement and transfer in good faith, as stipulated in U.C.C. 3-301. If such a promise to pay is rendered invalid, it casts doubt on the legitimacy of the entire debt. As established in U.C.C., the debt is either considered satisfied or entirely nullified.capital One refusal to honor this note, despite my actions in alignment with the U.C.C., amounts to a full discharge of the debt as per U.C.C. 3-603. It falls upon Capital One to demonstrate that the issued coupon note does not fulfill the criteria established in the U.C.C. By not acknowledging my rightful claim, I unjustly benefits from the security of the landed estate, which has been trustfully placed into the XXXX XXXX XXXX XXXX. UCC-1 Filed by The Federal Reserve even says that all bills are prepaid.

Also, they are commiting Securities and Tax Fraud. In the report it states that in Funding section " Our primary source of funding comes from retail deposits, as they are a relatively stable and lower cost source of funding. In addition to deposits, we raise funding through the issuance of senior and subordinated notes and securitized debt obligations, federal funds purchased, securities loaned or sold under agreements to repurchase and FHLB advances secured by certain portions of our loan and securities portfolios. A key objective in our use of these markets is to maintain access to a diversified mix of wholesale funding sources. See Consolidated Balance Sheets AnalysisFunding Sources Composition for additional information on our primary sources of funding. '' What are securitized debt obligations? Securitized debt instruments are financial securities that are created by securitizing individual loans ( debt ). Securitization is a financial process that involves issuing securities that are backed by a number of assets, most commonly debt. The assets are transformed into securities, and the process is called securitization. The owner of the securities receives an income from the underlying assets ; hence, the term asset-backed securities. 

The Process of Securitization Securitization is a complex process that includes pooling a large number of loans and transferring the resulting payments to the security holders. The process begins with the entity that holds the assets, the originator, selling the assets to a legal entity, the special purpose vehicle ( SPV ). Depending on the situation, the SPV issues the bonds directly or pays the originator the balance on the debt that is sold, which increases the liquidity of the assets. 
The debt is then divided into bonds, which are sold on the open market. The bonds represent different amounts of risks that correspond to different yields for the bondholder. In the case of a mortgage-backed security, if the owner defaults, the house would be foreclosed and result in some recovery of the loaned funds. The action of going after the assets when someone defaults on the loan is the reason why the securities are called securitized. 
Examples : 1. Mortgage-backed Securities ( MBS ) Mortgage-backed securities ( MBS ) are bonds that are secured by homes or real estate loans. They are created when a large number of such loans are pooled together ( they could be as large as {$10.00} million ), and then the pool is sold to a government agency like XXXX XXXX, XXXX XXXX, or to a securities firm who will use it as collateral for another mortgage-backed security. 
2. Asset-backed Securities ( ABS ) Asset-backed securities ( ABS ) are bonds that are created from consumer debt. When consumers borrow money from the bank to fund a new car, student loan or credit cards, the loans become assets in the books of the entity ( usually a bank ) that is offering them this credit. The assets are then sold to a trust whose sole purpose is to issue bonds that are backed by such securities. The payments made on the loan flow through the trust to the investors who invest in these asset-backed securities. 
What this means is that my credit card was securitized and pledged. You have been pledging ( giving security on a loan ) credit loans to the Federal Reserve Bank as collateral, meaning you didn't disclose that my signature and credit application was being used to borrow money from a third party. This goes against the meaning of a contract. One essential element of contract is Certainty and Consideration and I was never made aware of this. To be enforceable, a contract must include certain terms, and the ability to fulfill the essential terms of an agreement must be guaranteed. These terms must be clear and unambiguous. There are two essential terms in any agreement : the first one is consideration or price to a bargain ( something of value given in exchange for something else of value. They didn't put up anything of value at all. consideration-https XXXX XXXX Consideration is a promise, performance, or forbearance bargained by a promisor in exchange for their promise. Consideration is the main element of a contract. Without consideration by both parties, a contract can not be enforceable. For instance, if a person used the money to purchase an apple, the apple is the merchants consideration, and the money is the persons consideration. Capital One didn't put up any consideration. contract-https : //www.law.cornell.edu/wex/contract A contract is an agreement between parties, creating mutual obligations that are enforceable by law. The basic elements required for the agreement to be a legally enforceable contract are : mutual assent, expressed by a valid offer and acceptance ; adequate consideration ; capacity ; and legality. In some states, elements of consideration can be satisfied by a valid substitute. Possible remedies for breach of contract include general damages, consequential damages, reliance damages, and specific performance. Background : Contracts are promises that the law will enforce. Contract law is generally governed by state common law, and while general overall contract law is common throughout the country, some specific court interpretations of a particular element of the contract may vary between the states. If a promise is breached, the law provides remedies to the harmed party, often in the form of monetary damages, or in limited circumstances, in the form of specific performance of the promise made. Elements -- Consideration and Mutual Assent Contracts arise when a duty comes into existence, because of a promise made by XXXX of the parties. To be legally binding as a contract, a promise must be exchanged for adequate consideration. The alleged contract with Capital One is null and void. It was never a lawful contract from the start. They are in breach of written agreements, use false and misleading advertisements, act without written permission, authorization, and without the alleged borrowers knowledge to transfer actual cash value from the alleged borrower to Federal Reserve XXXX XXXX investor and return it as a loan. In their GAAP ( account system ) it shows that the actual cash value shows up like a loan from the borrower to the bank or as a deposit which it is not taxable. So they are committing fraud, tax fraud to be exact and the IRS will be knowing about this. Now they are asking me to pay you the principal plus interest when they didn't put up anything at all which is a violation of a contract. My alleged credit cards that I have been paying on monthly was paid off soon as they cashed it in with the Federal Reserve Bank. Case law that supports this is https : XXXX XXXX XXXX, XXXX A., Plaintiff, v. XXXX XXXX and XXXX XXXX, XXXX and severally, Case No. XXXX Defendants. 

Other sections to note in their annual SEC Filing is : Short-Term Borrowings and Long-Term Debt We access the capital markets to meet our funding needs through the issuance of senior and subordinated notes, securitized debt obligations and federal funds purchased and securities loaned or sold under agreements to repurchase. In addition, we have access to short-term and long-term FHLB advances secured by certain investment securities.

Also Borrowing Capacity section : We maintain a shelf registration with the U.S. Securities and Exchange Commission ( SEC ) so that we may periodically offer and sell an indeterminate aggregate amount of senior or subordinated debt securities, preferred stock, depositary shares, common stock, purchase contracts, warrants and units. There is no limit under this shelf registration to the amount or number of such securities that we may offer and sell, subject to market conditions. In addition, we also maintain a shelf registration associated with our credit card securitization trust that allows us to periodically offer and sell up to {$30.00} XXXX  of securitized debt obligations and a shelf registration associated with our auto loan securitization trusts that allows us to periodically offer and sell up to {$25.00} XXXX  of securitized debt obligations. The registered amounts under these shelf registration statements are subject to continuing review and change in the future, including as part of the routine renewal process.

In addition to our issuance capacity under the shelf registration statements, we also have pledged collateral to support our access to FHLB advances, the Federal Reserve Discount Window, the Bank Term Funding Program ( BTFP ) and the Fixed Income Clearing Corporation - Government Securities Division ( FICCGSD ) general collateral financing repurchase agreement service. For each of these programs, the ability to borrow utilizing these sources is dependent on meeting the respective membership requirements. Our borrowing capacity in each program is a function of the collateral the Bank has posted with each counterparty, including any respective haircuts applied to that collateral. 
As of XX/XX/XXXX, we pledged both loans and securities to the FHLB to secure a maximum borrowing capacity of {$31.00} XXXX, of which {$50.00} XXXX was used. Our FHLB membership is supported by our investment in FHLB stock of {$18.00} XXXX and {$15.00} XXXX as of XX/XX/XXXX and XX/XX/XXXX, respectively. 
As a member of XXXX, we have {$15.00} XXXX of readily available borrowing capacity secured by securities from our investment portfolio as of XX/XX/XXXX. Our FICCGSD membership is supported by our investment in Depository Trust and Clearing Corporation ( DTCC ) common stock of {$370.00} XXXX as of both XX/XX/XXXX and XX/XX/XXXX. 
As of XX/XX/XXXX, we pledged loans to secure a borrowing capacity of {$40.00} XXXX under the Federal Reserve Discount Window. Additionally, we pledged securities to secure a borrowing capacity of {$9.00} XXXX under the BTFP. Our membership with the Federal Reserve is supported by our investment in Federal Reserve stock, which totaled {$1.00} XXXX as of both XX/XX/XXXX and XX/XX/XXXX Also Liquidity Risk Section : We have established liquidity practices that are intended to ensure that we have sufficient asset-based liquidity to cover our funding requirements and maintain adequate reserves to withstand the potential impact of deposit attrition or diminished liquidity in the funding markets. In addition to our cash and cash equivalents, we maintain liquidity reserves in the form of investment securities and certain loans that are either readily-marketable or pledgeable. Our liquidity reserves increased by {$11.00} XXXX to {$110.00} XXXX as of XX/XX/XXXX from XX/XX/XXXX, primarily due to increases in cash and cash equivalents. In addition to these liquidity reserves, we maintain access to a diversified mix of funding sources as discussed in the Borrowing Capacity and Funding sections below. See Part IIItem 7. MD & ARisk Management in our XXXX Form XXXX for additional information on our management of liquidity risk. 

Also, Securities Pledged and Received section : We pledged investment securities totaling {$44.00} XXXX and {$21.00} XXXX as of XX/XX/XXXX and XX/XX/XXXX, respectively. These securities are primarily pledged to support our access to Federal Home Loan Banks ( FHLB ) advances, the Bank Term Funding Program ( BTFP ) and Public Fund Deposits, as well as for other purposes as required or permitted by law. We accepted pledges of securities with a fair value of approximately {$72.00} XXXX and {$82.00} XXXX as of XX/XX/XXXX and XX/XX/XXXX, respectively, related to our derivative transactions. 

Also, Loans Pledged section : We pledged loan collateral of {$7.00} XXXX and {$9.00} XXXX to secure a portion of our FHLB borrowing capacity of {$31.00} XXXX and {$19.00} XXXX as of XX/XX/XXXX and XX/XX/XXXX, respectively. We also pledged loan collateral of {$69.00} XXXX and {$34.00} XXXX to secure our Federal Reserve XXXX XXXX borrowing capacity of {$40.00} XXXX and {$19.00} XXXX as of XX/XX/XXXX and XX/XX/XXXX, respectively. In addition to loans pledged, we have securitized a portion of our credit card and auto loan portfolios. See Note XXXX Interest Entities and Securitizations for additional information. 

Also, Securitization-Related XXXX  section '' In a securitization transaction, assets are transferred to a trust, which generally meets the definition of a XXXX. We engage in securitization activities as an issuer and an investor. Our primary securitization issuance activity includes credit card and auto securitizations, conducted through securitization trusts which we consolidate. Our continuing involvement in these securitization transactions mainly consists of acting as the primary servicer and holding certain retained interests. 
In our multifamily agency business, we originate multifamily commercial real estate loans and transfer them to government-sponsored enterprises ( GSEs ) who may, in turn, securitize them. We retain the related mortgage servicing rights ( MSRs ) and service the transferred loans pursuant to the guidelines set forth by the GSEs. As an investor, we hold primarily RMBS, CMBS, and ABS in our investment securities portfolio, which represent variable interests in the respective securitization trusts from which those securities were issued. We do not consolidate the securitization trusts employed in these transactions as we do not have the power to direct the activities that most significantly impact the economic performance of these securitization trusts. We exclude these VIEs from the tables within this note because we do not consider our continuing involvement with these VIEs to be significant as we either solely invest in securities issued by the XXXX and were not involved in the design of the XXXX or no transfers have occurred between the XXXX and ourselves. Our maximum exposure to loss as a result of our involvement with these VIEs is the carrying value of the MSRs and investment securities on our consolidated balance sheets as well as our contractual obligations under loss sharing arrangements. See Note XXXX, Contingencies, Guarantees and Others for information about the loss sharing agreements, Note XXXX and Other Intangible Assets for information related to our MSRs associated with these securitizations and Note XXXX Securities for more information on the securities held in our investment securities portfolio. In addition, where we have certain lending arrangements in the normal course of business with entities that could be VIEs, we have also excluded these VIEs from the tables presented in this note. See Note XXXX for additional information regarding our lending arrangements in the normal course of business. 
Also, Credit Card Securitizations section : We securitize a portion of our credit card loans which provides a source of funding for us. Credit card securitizations involve the transfer of credit card receivables to securitization trusts. These trusts then issue debt securities collateralized by the transferred receivables to third-party investors. We hold certain retained interests in our credit card securitizations and continue to service the receivables in these trusts. We consolidate these trusts because we are deemed to be the primary beneficiary as we have the power to direct the activities that most significantly impact the economic performance of the trusts, and the right to receive benefits or the obligation to absorb losses that could potentially be significant to the trusts. 


This is detailed on how they are committing fraud.

Company response to consumer: Closed with explanation