Consumer complaint received 2025-05-02 00:00:00
Product: Credit card — General-purpose credit card or charge card
Issue: Getting a credit card — Application denied
Company: ALLIANT CREDIT UNION
State: NY

Complaint narrative:
NOTICE OF ADVERSE ACTION RESPONSE AND DEMAND FOR COMPLIANCE Date : XX/XX/year> This correspondence serves as my formal response to the adverse action notice issued to me by Alliant Credit Union on XX/XX/year>, in relation to a denied request for credit concerning my application for a XXXX XXXX Credit Card. The basis for this denial, as stated in the notice, included general references to lack of certain credit accounts and real estate history. I reject this denial in full on the basis that it violates federal statutes, consumer protection laws, and the nature of credit as defined by commercial practice and law. 
XXXX. Lack of Defined Standards Constitutes Unlawful Discrimination The reasons listed for the denialsuch as the absence of a real estate-secured loan, insufficient bankcard account history, and length of revolving creditfail to identify any legally recognized or uniformly applied eligibility standards. The failure to disclose such standards constitutes a breach of fundamental consumer rights under : The Equal Credit Opportunity Act ( XXXX XXXX. XXXX ), which prohibits the use of arbitrary and non-transparent methods that result in discriminatory impact ; And The Fair Credit Reporting Act ( XXXX XXXX. XXXX ), which mandates that users of consumer reports must clearly disclose the key factors used in adverse decisions in a way that is specific, understandable, and actionable by the consumer. 

Denying access to credit based on factors not publicly disclosed or lawfully defined amounts to procedural discrimination and obstructs equal access to federally regulated credit systems. 
XXXX. Truth in Lending Act ( XXXX XXXX. XXXX et seq. ) The Applicant as the Original Creditor The Truth in Lending Act ( TILA ) was enacted to ensure transparency and accuracy in consumer credit transactions, requiring clear and full disclosure of terms so that consumers may make informed decisions. However, within the structure of modern financial operations, the very nature of how credit is issued places the applicantnot the bankas the original source of value. 

Pursuant to XXXX XXXX. XXXX ( Seventh ) and Federal Reserve publications such as XXXX XXXX XXXX XXXX Federal Reserve Bank XXXX XXXX ), banks do not lend their own money or assets. Instead, the promissory note or credit agreement signed by the applicant is treated as a negotiable instrument and asset, which the financial institution records as a liability on its balance sheet and a corresponding asset on its books. The institution then facilitates a ledger entry with the Federal Reserve to access funds credited against the value of that signed agreement. 

This process is further supported by XXXX Article XXXX ( Negotiable Instruments ) and XXXX XXXX, which defines an instrument signed by the applicant as a valid promise to pay and, therefore, a lawful instrument capable of being deposited or monetized. Once signed, the instrument represents the principal and authorizes funding, with the applicant having effectively prepaid the value through their commercial credit capacity. 

Thus, the applicants signature is the originating force of the transaction, and the financial institution serves as a mediary, facilitating the monetization of that signature through federal credit systems. This undermines any assertion that the bank is issuing a loan based on risk to its own capital. 

Accordingly, denying an application on the speculative basis of inability to repaywhere no debt has been accumulated and the credit is prepaid by the applicants commercial instrumentconstitutes a misrepresentation of the credit structure and a material omission in disclosure, potentially violating XXXX XXXX. XXXX. That statute provides that any willful concealment or falsification of material terms in a credit transaction may result in criminal liability. 

In this context, any assessment of credit worthiness that fails to acknowledge the applicants legal and commercial standing as the originator of the credit is not only misleading but incompatible with the legal and operational reality of credit issuance under federal commercial and banking laws. 
XXXX. The Applicant as the Originating Source of Credit In all commercial substance and banking practice, credit is issued not from the private assets of the lending institution but from monetization of the consumers contractual obligation. Therefore, the applicant, by signature, creates the commercial paper that is deposited, leveraged, and circulated within the financial system. This renders the applicant the source of value in the transaction, while the institution acts solely in the role of administrator and intermediary of the federal credit framework. 

Denial of such credit, where no fraud, default, or misrepresentation exists, and where no actual funding risk is imposed on the intermediary institution, amounts to an arbitrary obstruction of a transaction that the applicant is legally and commercially entitled to originate. 
XXXX. Denial Based on Real Estate or Collateral is Inherently Discriminatory The institutions reference to real estate ownership or absence thereof as a factor in denial is particularly egregious. There is no federal statute requiring real estate or collateral ownership as a precondition to accessing unsecured credit. To base denial on such grounds is to unlawfully presume inability or unworthiness, absent lawful justification. 

This assumption directly disadvantages applicants who may not yet hold such assets due to age, economic background, or accessthereby functioning as an exclusionary and economically biased standard not permitted under federal banking laws or public policy.

Company response to consumer: Closed with explanation