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Wells Fargo and commercial banks aren't the only institutions up to shenanigans lately. Navy FCU was falsely threatening its members that it would cause them trouble with commanding officers, and illegally blocked their debit cards for overdue payments on credit cards.  Navy FCU recently signed a Consent Order agreeing about the accused misdeeds.


Article Excerpt:
"The television commercials for Navy Federal Credit Union are so effective and sincere, you’d never know it’s an operation marked by mendacity, sham and deceit.

Before you get suckered in by the spot with the cute little Pomeranian kissing the big gruff Marine, find out why the Consumer Financial Protection Bureau (CFPB) ordered Navy Federal to pay its victims $23 million and a $5.5 million penalty for shady debt collection activities.

In a consent order issued Tuesday, CFPB presented a litany of offenses by Navy Federal, including violating the law by blocking debit cards, ATM machines and online accounts, and making empty threats to contact clients’ military superiors about overdue debts. The credit union also intimidated customers with false threats to garnish wages.

The only thing worse than an empty threat is a real one. But empty threats can take a toll, too, generating tension, stress and fear. Not all the threats were bogus, however. The credit union disabled electronic access for about 700,000 accounts after customers fell behind on credit payments.
    .....
...In the Consent Order signed by Cutler Dawson, Navy Federal’s president and chief executive, the credit union agreed “that the facts described in Section IV of the Consent Order will be taken as true.”Among the 79 findings in that section, CFPB said Navy Federal:

  • Presented “deceptive representations to hundreds of thousands of consumers.”
  • Used letters “that were likely to mislead reasonable consumers.”
  • Sent letters that “constitute deceptive acts or practices in violation” of the law.
  • “Made statements that were likely to mislead consumers over the telephone.”

No credit union executive or staff member was punished for the many transgressions or even tutored on proper conduct, according to the order. It said Navy Federal “lacks documentation that any employees were disciplined, reprimanded, or subject to additional training.”

FULL ARTICLE: https://www.washingtonpost.com/news/powerpost/wp/2016/10/12/navy-federal-ordered-to-pay-23-million-to-misled-customers/ 

Member Summary
Most Recent Posts
Do you think the big banks are innocent?  

I see your point here and I agree with you that credit unions aren't magically ... (more)

jerosen (Oct. 23, 2016 @ 2:07p) |

This discussion isn't about whether "big banks are innocent," it's about agendas.

stanolshefski (Oct. 23, 2016 @ 2:39p) |

What do you think the agenda is?

I mean I guess you don't think it's enforcing the law.

jerosen (Oct. 23, 2016 @ 3:42p) |

PYBD
Staff Summary
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There goes the zero balance transfer offers...

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Claimed that I owed them a few hundred measly bucks when the borrower was another person not of my name or location. Persisted for a decade until the normal credit problem reporting expiration had passed but was still reporting negatively, although nobody ever tried to collect. Had to threaten lawsuit for damage to credit to eliminate, using true credentials as financial regulator in DC! And I was NEVER even ELIGIBLE to join. More like a pirate financial institution.

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Urgh CFPB strikes again.

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Zaos said:   Urgh CFPB strikes again.
  Yep, thank the lord they are they are there for us consumers.

And, good thing I never carried through on that loan from NFCU.

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I'm considering joining NFCU. From what I read, it seems only people who had debts with NFCU got affected by this, right? I guess my question is if this would be a mistake or not. (Note that NFCU wouldn't be my main banking account).

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MrKlick said:   
Zaos said:   Urgh CFPB strikes again.
  Yep, thank the lord they are they are there for us consumers.

And, good thing I never carried through on that loan from NFCU.

Very well said about CFPB!  AND two days ago there was a case (I believe at the Supreme Court level) where some scum bank tried to dissolve CFPB altogether stating sometihng on this lines of CFPB is too powerful in it's current role. Heard it on the radio (NPR) so My memory might be a little grainy here.....but I remember the Court disagreed with the plaintiff bank but the court also said that CFPB appears to be too powerful in its current form of just a one-person head...so the court wanted the POTUS to get himself the highest power on top of the CFPB's current head-person

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dealgain said:   
MrKlick said:   
Zaos said:   Urgh CFPB strikes again.
  Yep, thank the lord they are they are there for us consumers.

And, good thing I never carried through on that loan from NFCU.

Very well said about CFPB!  AND two days ago there was a case (I believe at the Supreme Court level) where some scum bank tried to dissolve CFPB altogether stating sometihng on this lines of CFPB is too powerful in it's current role. Heard it on the radio (NPR) so My memory might be a little grainy here.....but I remember the Court disagreed with the plaintiff bank but the court also said that CFPB appears to be too powerful in its current form of just a one-person head...so the court wanted the POTUS to get himself the highest power on top of the CFPB's current head-person

  "...The Consumer Financial Protection Bureau survived a constitutional challenge and will remain in business, though a federal appeals court took away power from its director and tossed out a $109 million penalty against a mortgage company.The long-awaited decision was a blow to the agency, which was created in the wake of the financial crisis to regulate mortgages, credit cards and other products directed at consumers ...
The appellate court found the CFPB to be “unconstitutionally structured” because the autonomy vested in Director Richard Cordray -- who could only be fired by the president and for cause -- was a “gross departure from settled historical practice. ..."
http://www.bloomberg.com/news/articles/2016-10-11/consumer-finan...


 

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svap said:   "...The Consumer Financial Protection Bureau survived a constitutional challenge and will remain in business, though a federal appeals court took away power from its director and tossed out a $109 million penalty against a mortgage company.The long-awaited decision was a blow to the agency, which was created in the wake of the financial crisis to regulate mortgages, credit cards and other products directed at consumers ...
The appellate court found the CFPB to be “unconstitutionally structured” because the autonomy vested in Director Richard Cordray -- who could only be fired by the president and for cause -- was a “gross departure from settled historical practice. ..."
http://www.bloomberg.com/news/articles/2016-10-11/consumer-finan... 

 

  
That's going to be easily overturned when it is heard en banc before the whole DC court. That's why it isn't major news right now. 

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I can concur they have done this to me in the past. I accidentally forgot to pay my CC and within 10 days they disabled access to my online account and wouldnt even let me login to make a payment on the card. I thought it was a ridiculous practice as my mortgage, savings, and checkings were all fine at the time.

Wonder how to make a claim on this..

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NFCU has always had a track record of successfully tracking down deadbeats. Personally I like NFCU. You might dick around with Citibank, but Navy didn't play.

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avalon6 said:   
  
That's going to be easily overturned when it is heard en banc before the whole DC court. That's why it isn't major news right now. 


Panel decision was unanimous, en banc rehearing less likely than not. I'm thinking CFPB is pretty happy with this outcome. Allows everyone to save face and move on.

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cr3s said:   There goes the zero balance transfer offers...
  One is available right now with the Flagship Rewards Card:

"...get a 0% intro APR on purchases and balance transfers for 12 months."

https://www.navyfederal.org/products-services/cards/creditcards/...
 

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Some more specifics of what their collection department did:

"Navy Federal's “message to the consumer of ‘pay or be sued’ was inaccurate about 97 percent of the time," according to the CFPB announcement, "even among consumers who did not make a payment in response to the letters.”

According to the consent order, the credit union also allegedly:

Sent letters to 115 consumers threatening to contact their commanding officers about their delinquencies if the consumers didn’t make a prompt payment. CFPB again labeled this a false threat, citing a lack of evidence that the credit union ever contacted those commanders -- even those who failed to pay -- and lacked the authority to report such issues. Consumers who received such letters will receive at least $1,000.

Froze about 700,000 consumers out of their credit union accounts for being delinquent on a credit product -- an illegal practice, per the CFPB. The only access available was to make payments on delinquent or overdrawn accounts. CFPB ordered the credit union to end this practice and keep other accounts open despite any delinquencies.

Misrepresented the credit consequences of falling behind on a loan in about 68,000 letters to members. Many of these consumers were told they would find it “difficult, if not impossible” to get additional credit because they were behind on their payments, but the credit union didn’t review the consumers’ credit files before sending the letters, so they had no basis for that claim.

NFCU representatives also suggested they could cut or raise a consumer's credit score -- a decision ultimately made by credit bureaus, not by a customer's financial institution."

http://www.militarytimes.com/articles/navy-federal-ordered-to-pa...

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Any FW getting a piece of the 23M?

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fattywallace said:   Any FW getting a piece of the 23M?
  Check with the deadbeats on Creditboards  

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NFCU neither admitted or denied the CFPB findings, unlike Wells Fargo. See text of Consent Order.

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tuphat said:   NFCU neither admitted or denied the CFPB findings, unlike Wells Fargo. See text of Consent Order.

NFCU agreed “that the facts described in Section IV of the Consent Order will be taken as true.”

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NEDeals said:   
tuphat said:   NFCU neither admitted or denied the CFPB findings, unlike Wells Fargo. See text of Consent Order.

NFCU agreed “that the facts described in Section IV of the Consent Order will be taken as true.”

  Yes, but agreeing to the facts doesn't mean agreeing to whether you violated the law or not.  In court, opposing parties will often stipulate the facts, to move on to a judicial determination of those facts.  Also interesting that NFCU hasn't issued a press release, or attracted Congressional attention, unlike WFC.

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tuphat said:   
NEDeals said:   
tuphat said:   NFCU neither admitted or denied the CFPB findings, unlike Wells Fargo. See text of Consent Order.

NFCU agreed “that the facts described in Section IV of the Consent Order will be taken as true.”

  Yes, but agreeing to the facts doesn't mean agreeing to whether you violated the law or not.  In court, opposing parties will often stipulate the facts, to move on to a judicial determination of those facts.  Also interesting that NFCU hasn't issued a press release, or attracted Congressional attention, unlike WFC.

It undermines the arguments of the people who attack "big banks".

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stanolshefski said:   
tuphat said:   
NEDeals said:   
tuphat said:   NFCU neither admitted or denied the CFPB findings, unlike Wells Fargo. See text of Consent Order.

NFCU agreed “that the facts described in Section IV of the Consent Order will be taken as true.”

  Yes, but agreeing to the facts doesn't mean agreeing to whether you violated the law or not.  In court, opposing parties will often stipulate the facts, to move on to a judicial determination of those facts.  Also interesting that NFCU hasn't issued a press release, or attracted Congressional attention, unlike WFC.

It undermines the arguments of the people who attack "big banks".


  http://www.usacreditunions.com/top-100-credit-unions-by-cash-ass...

Biggest credit union.

 

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jarfykk said:   
stanolshefski said:   
tuphat said:   
NEDeals said:   
tuphat said:   NFCU neither admitted or denied the CFPB findings, unlike Wells Fargo. See text of Consent Order.

NFCU agreed “that the facts described in Section IV of the Consent Order will be taken as true.”

  Yes, but agreeing to the facts doesn't mean agreeing to whether you violated the law or not.  In court, opposing parties will often stipulate the facts, to move on to a judicial determination of those facts.  Also interesting that NFCU hasn't issued a press release, or attracted Congressional attention, unlike WFC.

It undermines the arguments of the people who attack "big banks".

  http://www.usacreditunions.com/top-100-credit-unions-by-cash-ass... 

Biggest credit union.
 

  I know it's the biggest credit union, but the people pushing the "big banks" narrative have pushed credit unions as a solution. It goes against their narrative, so they don't promote it.

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Argyll said:   Some more specifics of what their collection department did:

"Navy Federal's “message to the consumer of ‘pay or be sued’ was inaccurate about 97 percent of the time," according to the CFPB announcement, "even among consumers who did not make a payment in response to the letters.”

According to the consent order, the credit union also allegedly:

Sent letters to 115 consumers threatening to contact their commanding officers about their delinquencies if the consumers didn’t make a prompt payment. CFPB again labeled this a false threat, citing a lack of evidence that the credit union ever contacted those commanders -- even those who failed to pay -- and lacked the authority to report such issues. Consumers who received such letters will receive at least $1,000.

Froze about 700,000 consumers out of their credit union accounts for being delinquent on a credit product -- an illegal practice, per the CFPB. The only access available was to make payments on delinquent or overdrawn accounts. CFPB ordered the credit union to end this practice and keep other accounts open despite any delinquencies.

Misrepresented the credit consequences of falling behind on a loan in about 68,000 letters to members. Many of these consumers were told they would find it “difficult, if not impossible” to get additional credit because they were behind on their payments, but the credit union didn’t review the consumers’ credit files before sending the letters, so they had no basis for that claim.

NFCU representatives also suggested they could cut or raise a consumer's credit score -- a decision ultimately made by credit bureaus, not by a customer's financial institution."

http://www.militarytimes.com/articles/navy-federal-ordered-to-pa...

  
So in true FWF fashion I didn't read the attached article but it sounds more like the regulators had a problem with NFCU not following through on the threats rather than making them?

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psychoslowmatic said:   
Argyll said:   Some more specifics of what their collection department did:

"Navy Federal's “message to the consumer of ‘pay or be sued’ was inaccurate about 97 percent of the time," according to the CFPB announcement, "even among consumers who did not make a payment in response to the letters.”

According to the consent order, the credit union also allegedly:

Sent letters to 115 consumers threatening to contact their commanding officers about their delinquencies if the consumers didn’t make a prompt payment. CFPB again labeled this a false threat, citing a lack of evidence that the credit union ever contacted those commanders -- even those who failed to pay -- and lacked the authority to report such issues. Consumers who received such letters will receive at least $1,000.

Froze about 700,000 consumers out of their credit union accounts for being delinquent on a credit product -- an illegal practice, per the CFPB. The only access available was to make payments on delinquent or overdrawn accounts. CFPB ordered the credit union to end this practice and keep other accounts open despite any delinquencies.

Misrepresented the credit consequences of falling behind on a loan in about 68,000 letters to members. Many of these consumers were told they would find it “difficult, if not impossible” to get additional credit because they were behind on their payments, but the credit union didn’t review the consumers’ credit files before sending the letters, so they had no basis for that claim.

NFCU representatives also suggested they could cut or raise a consumer's credit score -- a decision ultimately made by credit bureaus, not by a customer's financial institution."

http://www.militarytimes.com/articles/navy-federal-ordered-to-pa...

  
So in true FWF fashion I didn't read the attached article but it sounds more like the regulators had a problem with NFCU not following through on the threats rather than making them?

  Read the excerpt again. Not only were the threats false, it was illegal to follow through on them.  "They lacked the authority to report such issues."  They made false threats about doing something illegal.  They did not carry through the threats, but they were still unconscionable and illegal threats,

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stanolshefski said:   
jarfykk said:   
stanolshefski said:   
tuphat said:   
NEDeals said:   
tuphat said:   NFCU neither admitted or denied the CFPB findings, unlike Wells Fargo. See text of Consent Order.

NFCU agreed “that the facts described in Section IV of the Consent Order will be taken as true.”

  Yes, but agreeing to the facts doesn't mean agreeing to whether you violated the law or not.  In court, opposing parties will often stipulate the facts, to move on to a judicial determination of those facts.  Also interesting that NFCU hasn't issued a press release, or attracted Congressional attention, unlike WFC.

It undermines the arguments of the people who attack "big banks".

  http://www.usacreditunions.com/top-100-credit-unions-by-cash-ass... 

Biggest credit union.

  I know it's the biggest credit union, but the people pushing the "big banks" narrative have pushed credit unions as a solution. It goes against their narrative, so they don't promote it.
 

  
Do you think the big banks are innocent?  

I see your point here and I agree with you that credit unions aren't magically immune to abuse.  
But I don't think people are trying to sweep the NFCU problems under the rug or anything.    WF recent problems got a lot more press but what they did is more severe (IMHO) and WF is 20x as big as any credit union.

 

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jerosen said:   
stanolshefski said:   
jarfykk said:   
stanolshefski said:   
tuphat said:   
NEDeals said:   
tuphat said:   NFCU neither admitted or denied the CFPB findings, unlike Wells Fargo. See text of Consent Order.

NFCU agreed “that the facts described in Section IV of the Consent Order will be taken as true.”

  Yes, but agreeing to the facts doesn't mean agreeing to whether you violated the law or not.  In court, opposing parties will often stipulate the facts, to move on to a judicial determination of those facts.  Also interesting that NFCU hasn't issued a press release, or attracted Congressional attention, unlike WFC.

It undermines the arguments of the people who attack "big banks".

  http://www.usacreditunions.com/top-100-credit-unions-by-cash-ass... 

Biggest credit union.

  I know it's the biggest credit union, but the people pushing the "big banks" narrative have pushed credit unions as a solution. It goes against their narrative, so they don't promote it.

Do you think the big banks are innocent?  

I see your point here and I agree with you that credit unions aren't magically immune to abuse.  
But I don't think people are trying to sweep the NFCU problems under the rug or anything.    WF recent problems got a lot more press but what they did is more severe (IMHO) and WF is 20x as big as any credit union.
 

  This discussion isn't about whether "big banks are innocent," it's about agendas.

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What do you think the agenda is?

I mean I guess you don't think it's enforcing the law.

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