Consumer complaint received 2026-04-27 00:00:00
Product: Payday loan, title loan, personal loan, or advance loan — Personal line of credit
Issue: Problem when making payments — 
Company: UNITED SERVICES AUTOMOBILE ASSOCIATION
State: CA

Complaint narrative:
This complaint is based on a review of both the XXXX XXXX contract and the full payment history, including how payments were actually applied by USAA. The promissory note clearly establishes : A bi-weekly payment obligation of {$340.00} Payments due on the SAME day of each TWO WEEK PERIOD beginning XX/XX/year> A late fee only if a payment is more than 15 days after due A required payment application hierarchy : fees interest principal late charges principal Despite this clear structure, my payment history demonstrates that USAAs servicing and application of payments is inconsistent with both the contractual terms and federal consumer protection requirements. 1. Structural Payment Misalignment and Manufactured Delinquency My payments have been made consistently on a bi-weekly basis, in accordance with the contractual schedule. However, USAAs internal servicing appears to treat payments as though they must align to a separate or undisclosed billing expectation, resulting in : Payments being treated as late despite adherence to the bi-weekly cadence Late fees being assessed even when payments fall within a reasonable interpretation of the contractual timing A pattern of recurring fee generation driven by servicing mechanicsnot borrower behavior This creates a manufactured delinquency condition, where the structure itself guarantees late fee exposure. 2. Improper Application of Payments The contract explicitly requires payments to be applied in a specific order. Based on the payment history : Payments are being applied in a manner that maximizes fee exposure, rather than reducing outstanding obligations Late fees appear to persist and cascade, suggesting they are not being neutralized in accordance with the contractual clause stating that no late charge will be assessed when delinquency is solely due to prior late fees This indicates a potential breach of contract and improper servicing conduct 3. TILA / Regulation Z Violations This conduct raises significant issues under the Truth in Lending Act ( TILA ) and Regulation Z ( 12 C.F.R. Part 1026 ) : 12 C.F.R. 1026.17 & 1026.18 ( Clear and Conspicuous Disclosures ) : The loan discloses a bi-weekly structure but fails to clearly explain how payment timing is evaluated in practice. The actual servicing behavior contradicts the borrowers reasonable understanding of the disclosed terms. 12 C.F.R. 1026.36 ( c ) ( 1 ) ( Prohibition on pyramiding late fees ) : The payment history strongly suggests fee pyramiding, where prior late fees contribute to subsequent delinquency determinations. This is explicitly restricted under federal law. Payment processing transparency requirements : A lender can not disclose one payment structure while operationalizing another in a way that predictably generates penalties. 4. UDAAP Violations ( Dodd-Frank Act ) USAAs conduct also meets the threshold for Unfair, Deceptive, or Abusive Acts or Practices ( UDAAP ) : Unfair : Causes ongoing financial harm ( recurring late fees ) that is not reasonably avoidable by the consumer, despite consistent payment behavior. Deceptive : The disclosed bi-weekly payment structure does not match how payments are actually evaluated for timeliness. Abusive : USAA has refused to correct a known structural issue and instead directs the borrower toward a refinance requiring a hard credit inquiry, which their own representatives acknowledge will likely be denied. This exploits the borrowers lack of ability to correct the servicing defect independently. 5. Refusal to Provide Reasonable Administrative Remedy USAA has confirmed that the only solution is refinancing. This is not a legitimate remedy because : It introduces credit harm via hard inquiry It is knowingly unlikely to succeed It avoids addressing the root servicing defect A simple due date realignment or payment schedule modification is operationally trivial and contractually permissible, yet has been refused.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation