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UPDATE April 30 2009
My brothers CC account was re-activated with the full 25k CL last night.
He fowarded a lenghthy letter with his EQ report, EQ dipute correction report and has been waiting for news from the loan committee.
Thanks everyone for your kind words and support.
I still am shocked that PenFed is going the universal default route but at least this gives some indication that if there is an error they are wiling to listen and correct the situation.