Consumer complaint received 2025-09-02 00:00:00
Product: Vehicle loan or lease — Loan
Issue: Managing the loan or lease — Loan sold or transferred to another company
Company: NAVY FEDERAL CREDIT UNION
State: MD

Complaint narrative:
Navy Federal Credit Union ( NFCU ) is violating federal consumer protection laws by controlling my vehicle collateral ( title ) and note without legal authority and refusing to honor my contractual alternative performance rights. 

In XX/XX/year>, I obtained an {$81000.00} vehicle loan that included a promissory note instrument with an " in lieu of payment of instrument '' clause. This clause allowed me to satisfy the debt through alternative performance - providing an amended contract and perfected security interest instead of monetary payments. I properly exercised this contractual right and fulfilled all requirements. However, the lender has improperly rejected my valid alternative performance and continues to control my vehicle collateral and demand payment via cash. 

I've sent multiple notices ( Notice of Default, Opportunity to Cure, Formal Notice of Default Before Arbitration ), and called multiple times, only for NFCU and its agents to ignore ( hang up on me ) my core dispute, suggesting this was a credit reporting agency issue, which it is not. I've requested documentation as to where my promissory note was being held, again being ignored and told that specific departments don't exist ( securitization, XXXX, clearing, etc ). The lender 's agent even told me that NFCU does not follow bylaws or federal law. 

The core problem is that NFCU sold/assigned my promissory note to a trust/trust company within months of origination ( standard industry practice ), yet continues acting as if they own the debt ( the debt follows the note ). NFCU retained only servicing rights but is making material decisions about my collateral without legal authority from the current note holder. This is blocking me from transferring to my irrevocable trust. This is all still happening even after NFCU 's POA and security interest have been revoked. 

The lender has breached our contract by refusing to honor my properly exercised " in lieu of payment '' clause, and trying to maintain contractual rights of a holder in due course even though they transferred/assigned my promissory note inconspicuously. 

SPECIFIC VIOLATIONS 1. TRUTH IN LENDING ACT VIOLATIONS- Failure to provide assignment notices when my note was transferred - Misrepresentation of creditor identity - continuing to collect as if they own the debt - Failure to identify current creditor when requested 2. FAIR DEBT COLLECTION PRACTICES ACT VIOLATIONS - Collecting on debt not owned - they sold my note but continue collections - Misrepresenting legal authority - claiming rights they don't possess - Unfair practices - refusing contractual alternative performance 3. UNFAIR, DECEPTIVE, OR ABUSIVE ACTS OR PRACTICES ( UDAAP ) - Deceptive : Misrepresenting their authority over my collateral - Unfair : Denying my contractual alternative performance rights- Abusive : Leveraging my lack of understanding about securitization to maintain improper control 4. UCC ARTICLE 9 VIOLATIONS - Failure to provide proper assignment notices to the debtor - Acting without legal standing to control security interests- Improper security interest perfection ( potentially wrong method for collateral type ) 5. FINANCIAL HARM - Improper collections- All payments made after note assignment may be invalid - Blocked vehicle transfer - Can not transfer vehicle to my irrevocable trust for estate planning - Denial of contractual rights - Can not exercise valid alternative performance despite compliance - Improper lien maintenance - Vehicle title shows a lien despite my contractual compliance/performance - Legal costs - Forced to seek legal remedy for lender 's breach and regulatory violations - Opportunity costs - Estate planning delayed, potential tax implications- Credit implications- Risk of improper credit reporting on discharged obligation

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