Consumer complaint received 2024-06-07 00:00:00
Product: Credit reporting or other personal consumer reports — Credit reporting
Issue: Improper use of your report — Reporting company used your report improperly
Company: NAVY FEDERAL CREDIT UNION
State: CA

Complaint narrative:
on XX/XX/year>, I obtained a vehicle load from Navy Federal Credit Union. Navy Federal claims that it provided me with the funds to purchase my vehicle, when in fact, this false and misleading statement can't be further from the truth. Federal Law describes the powers and duties of banks under 12 U.S.C 1431. No where in this federal code does it say that banks have the power to lend money. In fact, the only powers and duties that a bank has are : 1.Borrowing money and 2. Issuing bonds and debentures. Each Federal Home Loan Bank shall have power, subject to rules and regulations prescribed by the Director, to borrow and give security therefor and to pay interest thereon, to issue debentures, bonds, or other obligations upon such terms and conditions as the Director may approve, and to do all things necessary for carrying out the provisions of this chapter and all things incident thereto.

Since Navy Federal does not have the ability to lend money, where did they get the funds to provide to me to purchase my vehicle? It is to my understanding that the Promissory Note in this credit transaction is the only collateral and NOT the vehicle. This fact is backed by the Federal Reserve Act section 16 Note issues. This section explains how banks apply for notes at the Federal Reserve Banks. When applying, 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 notes, drafts, bills of exchange, or acceptances acquired under section 10A, 10B, 13, or 13A of this Act. In essence, the amount of the collateral ( notes, drafts, bills of exchange, or acceptances ) must equal the amount of notes that the bank is applying for.

Navy Federal applied for notes using the collateral/ Promissory Note that was extended by me to receive an advance for the full amount of my vehicle load contact. They received the money within 24 hours because certificates of indebtedness are paid out no less than that amount of time. Navy Federal then provided me with the same money that they received from my promissory note back to me along with the interest that they are actually supposed to pay me, This is the interest that was stated in 12 U.S.C 1431. That same promissory note has developed a CUSIP number which is being traded at this very moment. I have provided Navy Federal with a financial asset via my Promissory Note which they are able to trade and receive capital from but what did I receive in exchange for this barter, a vehicle that was already prepaid that I still have to pay for?

I demand that Navy Federal produce any records that show where the funds for my vehicle loan came from. This includes any balance sheets/ 120 logs that show the transfer of such funds. If this documentation can not be provided, it is simply because it does not exist. Navy Federal erroneously has its name on my vehicle title when in fact there is no lien on my vehicle after conducting a UCC-11 search. This proves that Navy Federal has no legal right of recourse for the collateral.

Again, I ask request any records that show where the funds for my vehicle loan came from. This includes any balance sheets/120 logs that show the transfer of such funds. I also request proof of the perfected lien Navy Federal has on my vehicle title.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with non-monetary relief