Consumer complaint received 2025-10-17 00:00:00
Product: Debt or credit management — Debt settlement
Issue: Unauthorized withdrawals or charges — 
Company: NAVY FEDERAL CREDIT UNION
State: VA

Complaint narrative:
Formal Complaint Regarding Navy Federal Credit Union Consumer Financial Protection Bureau ( CFPB ) and XXXX XXXX XXXX XXXX ( XXXX ) Complaint Against Navy Federal Credit Union Unfair Account Practices, Hardship Denial, and Unauthorized Withdrawal Summary of Issue I am filing this complaint against Navy Federal Credit Union for unfair and inconsistent treatment, denial of hardship assistance, and unauthorized withdrawal of funds from my checking account under their right of offset policy. 
In XX/XX/year>, Navy Federal withdrew funds from my checking account without notice to cover a credit card payment that was only XXXX days late. I had already informed them that I was experiencing financial hardship and planned to make the payment on my next payday. Those funds were needed for essential bills including a XXXX XXXX hardship payment due the next day, which I had promised to make as part of an approved XXXX hardship plan. 

Hardship Denial and Invasive Review Before the withdrawal, I applied for a hardship payment plan with Navy Federal. My request was denied based on my debt-to-income ratio, even after I explained that I am currently in the middle of ongoing divorce litigation, which has temporarily depleted my earning capacity.

Despite my clear and documented hardship, Navy Federals representatives subjected me to an hour-long interrogation about every detail of my finances including all of my bank accounts, recurring bills, and expenses yet they never requested actual proof of income or hardship. 
By contrast, XXXX XXXX, with whom I have only banked XXXX year longer, requested a single document : my most recent tax return, which shows my reduced income. Based on that proof, they immediately approved a XXXX hardship plan and card freeze. Their process was reasonable, professional, and compassionate.

Navy Federals process, however, was invasive, subjective, and unproductive. After denying me assistance, they immediately seized funds from my checking account knowing from our conversation that I was struggling to afford even essential bills. 
Unfortunately, it is now too late to request that the funds be returned to my account, as I am facing the immediate consequence of being unable to make the XXXX XXXX hardship payment that was due the following day. That payment plan was granted to me in good faith, and I had every intention of honoring it. Navy Federals decision to seize those funds directly caused my inability to fulfill that commitment to an institution that treated me with fairness and understanding.

History of Responsible Repayment Prior to this recent hardship, I always paid at least the minimum due on my Navy Federal credit card and, more often than not, paid well above the minimum. This financial setback is temporary and has lasted only the past XXXX months. Rather than taking my strong payment history and transparent communication into account, Navy Federal treated me as a delinquent risk instead of a loyal member seeking a short-term solution This lack of compassion and flexibility contradicts Navy Federals stated mission of serving service members and their families. Institutions such as USAA, where I have banked for over 20 years, have consistently demonstrated fairness and genuine concern for their members during difficult times. Navy Federal has not.

Systemic and Technical Issues In addition to the hardship issue, Navy Federals online banking system is poorly designed and confusing.

The system fails to deduct pending transactions from the displayed available balance, which makes it easy to overdraft or exceed credit limits.

Every other financial institution Ive used automatically accounts for pending amounts to prevent such errors.

This lack of clarity, combined with Navy Federals rigid customer service approach, makes it unnecessarily difficult for members to manage their accounts responsibly.

Requested Resolution I respectfully request that the regulators : Investigate Navy Federals hardship review process, including its reliance on subjective interviews rather than documented financial proof ; Examine the fairness of their debt-to-income-based denials, which penalize members precisely because they are struggling ; Review and modernize their online banking practices so that available balances accurately reflect pending transactions ; and Direct Navy Federal to implement compassionate , transparent , and member-supportive hardship procedures, consistent with their stated mission and industry standards.

Statement I am filing this complaint in good faith to seek accountability and fairness. I have a long history of acting in good faith with all financial institutions. Navy Federals conduct has caused me financial and emotional distress during an already challenging period. I urge regulators to review their policies and require fair treatment for members, especially those experiencing temporary hardship.

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