The below is for data point purposes and is my account of events regarding my request to Navy Federal Credit Union (NFCU) to receive a lending product with them, after they suffered a loss during my 9-year-old discharged Chapter 7 Bankruptcy. I have been corresponding with many folks by way of Private Message, but wanted to provide this data point for the entire community. I’ve started with the Conclusion/Results to make this post as clear and concise as I can. Of course, I welcome you to read the detailed accounts for the best understanding of events.
As with everything, YMMV. The below is documentation based on my experience, voice conversations, letters, and secure message exchanges.
Conclusion / Result(s) / Data Points
- If you cause NFCU a loss during bankruptcy, you will not be approved for a lending product until you voluntarily pay back the ENTIRE amount.
- After your discharge, if you still qualify for NFCU membership (or did not close your share account), you CAN get deposit accounts including checking, savings, CDs, MMSA, and IRAs with NFCU. The accounts can be used without restrictions.
- They will not remove the Notice from your mobile app which states “Your account information is being provided for informational purposes only. Providing you this information is not an attempt to collect a debt.”
- The system usually will not open deposit accounts automatically online because of the flag. It will go into the queue for an associate to open it, but is usually opened within 2 business days.
- Per the bankruptcy department, the flag on the account is to keep the computer system from automatically approving a person for credit based on their credit report when NFCU has suffered a loss. Without the flag, the computer may automatically approve a person for credit. (I had no way to test this as my account has a flag, so the computer automatically denied any credit applications I entered online with the reason code “You Caused Navy Federal a Loss”. No credit application would be pulled during these denials. Basically, a black list)
- Per the bankruptcy department, they have no influence over the lending team’s decision to provide credit. The flag does NOT stop the lending team from making a favorable decision about a credit application. (FYI: See #1, as that’s been my experience and the experience of most others as documented in the forums)
- The “Lending Committee” (which is the wording that displays on denial letters) is not a committee. This is the Lending Team. The terms are used interchangeably internally at NFCU, thus seeming to give a false impression to consumers that they can appeal to a “Committee” to review a lending decision. In all actuality, it’s just another person from the Lending Team. (Weirdly enough, this information was given to me directly through a secured message)
- BBB has an email address on file to contact NFCU. It’s listed as a “priority” email address. I received no response from it. (YMMV)
- There is a separate lending team for credit cards than for auto loans.
Detailed Account of Events:
As some of you know, my NFCU story started many years ago, in the below thread. Please do not respond to that thread. I’ve only listed it for historical purposes.
http://ficoforums.myfico.com/t5/Bankruptcy/Navy-Federal-CU-amp-Bankruptcy/m-p/690713#M6039
Here is a detailed account of events that provided me the above data points to share with the community.
Oct 2008
- File Bankruptcy, NFCU Included. Advised I could no longer have deposit accounts, they were closed by NFCU
Jul 2010
- Filled out an application to get deposit accounts back with NFCU. It was denied, even though I still qualified for membership. Wrote to executive offices, still denied.
Aug 2016
- Went into the branch to deposit money into my brother’s NFCU account. The rep asked me why I didn’t have an account with them so I could just use the Member to Member transfer feature. I told her about the above. She advised that NFCU policies regarding bankruptcy have changed. I set down with a member specialist and opened new deposit accounts. (my access number stayed the same)
Oct 2016
- I applied for a cashRewards Credit Card and to refinance my vehicle. It was an instant denial stating “You Caused Navy Federal a Loss”
- The loan officer contacted the lending team; they explained I needed to rebuild my credit relationship with NFCU and suggested a secured loan. The first secured loan application was automatically denied for the same reason as above; the loan specialist had to make another phone call, and then my application was approved and a share secured loan established.
- I was advised to pay on the secured loan to re-establish credit with NFCU and come back to the branch in March 2017 to have the loan officer do a “manual, level 2” application for the cashRewards Credit Card and auto loan refinancing.
Mar 2017
- I came into the branch on 3/10, did the application and received a denial. I was advised to wait for the denial paperwork and bring it back into the bank because they could not “see” the reason for denial. I received the denial letter, and it had the same code as before, “You Caused Navy Federal a Loss”.
- The loan officer stated I need to provide a letter of explanation to the Lending Committee (as listed on the denial letter), and to bring the letter into the branch as they would fax it to the Lending Committee for me so I wouldn’t have to wait for it to go through postal mail.
- I brought the letter back into the branch on 3/18. The letter was faxed and was advised it would take the Lending Committee 2 – 4 weeks to review.
- On 3/23 I received a message to my NFCU secure inbox titled “Appeal”. It indicated in order to process my appeal, I needed to submit a new application. It directed me to go into the branch or call the toll-free number to expedite the process.
- I called the toll-free number, spoke with a young lady that told me since all the fields on the application were technically not changing, she couldn’t do another application. I asked how the Lending Committee was supposed to review my application from 3/10 if this is the case. She advised I needed to speak with the bankruptcy department. I was transferred.
- I spoke with a nice young lady in the bankruptcy department. She advised that the Lending Committee is free to make any decision they want, and the code on my account is not preventing them from making a decision. She explained the code only prevents me from being automatically approved by the computer, which would happen because I’ve re-established my credit very well. She advised I need to speak with the Lending Committee, but there is no phone number to contact that committee, so she suggested I just reply to the message in my secure inbox that was originally sent to me.
- I replied to the secure message, and explained my correspondences from the two items above. I received a response that since no fields would be changing on the application, the Lending “TEAM” would not come to a different conclusion than the original decision.
- I sent an email to the BBB priority email address for NFCU (I never received a response)
- I sent a response back through my secure portal to the Appeal message. I provided clarity that I was not denied because of anything incorrect on my application. I explained my letter of appeal show cases the sequence of events, and that information could not be documented on the application as there is not a spot to do so. I also asked who the Lending “team” was as my understanding is my letter of appeal would be reviewed by a Lending “committee”.
- Received a response. Since I caused NFCU a loss, no lending products would ever be approved, and I should not have even been able to get the share secured loan. I could voluntarily pay NFCU back for the loss to be considered for lending products in the future. The response also indicated the lending committee and the lending team are the same group.
Apr 2017
- I closed most of my deposit accounts with NFCU and transferred the funds out. I did leave open my checking and savings account with minimal funds since there is no fee.
Current Score: Eq: 823 Tu: 830
Unfortunately paying them back directly is not quite in my budget. I did try to make the argument of bring all of my deposit accounts, having all of my lending, and running a pretty high yearly amount through their credit card as a way for them to "recoup" some of the losses with me using them for all of my lending products, but that also was a no go.
Thanks for the info. Isn't this similar to how most credit unions act if you burn them in BK?
I joined NFCU after my BK discharge and this is my first CU I've joined but from what I've read in the past, it seems like CU are even harder then the big boys to get back into good graces with after you burn them in BK.
@Anonymous wrote:Appreciate this info! I was an authorized (secondary?) user on my now ex-wife’s credit card with NFCU. She ran up the card and others and left me and the kids behind and promptly filed Chapt 7. I had little choice but to file eventually too so burned NFCU for approx. $14K credit card balance. I still have a small savings with them and hoped to get back in with a credit card down the road but sounds like I would need to cough up the $14K first, and don’t foresee myself stumbling upon those funds. Also doubt since I was a secondary they would excuse that.
Unless I am understanding wrong it sounds like you are saying that you were an authorized user on her cards.... If that in fact is true just dispute it off your credit report and they cannot hold it against it but in the likelyhood you are saying authorized you mean co-signer then yes you are responsible if she doenst follow throuhg and you did in fact burn them by filing CH7.
@GatorsFan84 wrote:Thanks for the info. Isn't this similar to how most credit unions act if you burn them in BK?
I joined NFCU after my BK discharge and this is my first CU I've joined but from what I've read in the past, it seems like CU are even harder then the big boys to get back into good graces with after you burn them in BK.
You are correct. I do think this is how most credit unions are. I posted because it seemed that some of the lending folks interpreted polices within NFCU as having "changed". Basically it sounds like they did change their policies to where you could have deposit accounts with them again, but their policies on lending products have nnot changed. Which during the first couple months of reopening my account, they indicated the lending policies had changed and I just needed to "re-establish" my credit with NFCU, thus the reason for the secured loan. You probably noticed by my credit profile, I have no need for a secured loan. I only opened it because of the direction of the lending person to get back in the good graces with NFCU (even though I had burned them in bankruptcy). As we are able to see now by the outcome, that was incorrect information, and getting back into the good graces is only accomplished by paying them back. Which we knew that, but I thought something had actually changed. So, not faulting NFCU for their policy, just thought there was a change.
@jason0618 wrote:
I've thought of paying them back after my bk. Just on principle. I included them only because my lawyer said I couldn't pay the card off and not include them in my bankruptcy. I just figure I could find more to do with $5,000 and a "hope". Sorry it didn't work out for you
Yes, there are some things that I found out after bankrutpcy that I wish I would have known prior to. It certainly would have changed my actions. But it is what is now. I agree with you, there are other things that you could do with the $5k. Now, certainly if I got hit by the lottery bus, then I would consider paying everyone back, but at this time, If I were to do a payback to NFCU, then it would put me back where I was before, and I never want to go back to that financial place again. I did leave my checking and savings account open with them this time. So, if something drastically changes, then at least I still have my membership. Hey, having 25years with NFCU is not too terribly far off, maybe that might trigger something. 