LAKE FOREST, Ill.—According to the CFPB, the largest credit unions in the nation are attracting the majority of complaints consumers are making against CUs, with Navy FCU receiving most of the gripes.
It should be noted, however, that Navy Federal has 5.69 million members.
In June the CFPB started to release details on complaints consumers have made against financial companies.
Of the data the CFPB has made available, 102 financial institutions had complaints filed against them, according to a recent review of the complaint data by Moebs $ervices.
The complaints were tallied against four CUs—Navy, Pentagon FCU, (North Carolina) State Employees’ CU and Boeing Employees' CU (BECU). Those complaints make up less than 1% of all FI complaints, according to the Moebs study. The majority of the complaints—92.2%—were against large banks with assets greater than $10 billion.
627,000 Complaints
Moebs research shows that 627,000 complaints were taken from December 2011 to June 2015 and 410,007 total complaints were made available. Financial institutions made up 207,187, or 51.5% of the total available complaints. The remaining 202,820, or 49.6% of all complaints, were non-financial service firms, which mainly consist of credit reporting agencies, collection agencies and law firms involved with debt collection.
The $70-billion Navy attracted 72.4% of all credit union complaints, the $18.6-billion Pentagon collected 22.8%, $31-billion SECU 3.1% and $13.6-billion BECU 1%.
Of the total FI complaints the CFPB has made available, 36.7% are for mortgages. CU mortgage complaints made up only 25.9% of the complaints filed against them.
“Navy Federal Credit Union has majority of all the CU complaints. But interestingly, only 1.9% of Navy’s complaints are about overdrafts, noted Danielle Martorano, director of research at Moebs $ervices. “Almost a fourth of their complaints can be attributed to mortgages. Pentagon follows with almost one-fourth of the credit union complaints. Mortgages and credit cards are the main complaint for Pentagon. Checking is the product most BECU members griped over.
“When looking at the credit union complaint categories broken down, in every category Navy FCU leads,” continued Martorano. “Interestingly, SECU comes in second with overdrafts, despite having only 3.1% of all the CU complaints.”
Wells Fargo Tops For OD Issues
Wells Fargo (16.55% of all FI overdraft complaints) is the top ranked financial institution when looking at overdraft issues. Following in second is Bank of America (15.76% of all FI overdraft complaints). TD Bank (7.94%), Chase (7.82%), and PNC (6.8%) are next in line. Credit unions make up only 0.42% of total overdraft complaints.
But one negative for CUs that can be drawn from the numbers, according to the Moebs’ study, is that credit unions are doing poorly with checking account service when compared to the entire financial services industry. Of all the complaints Moebs $ervices reviewed, 35.3% were for deposit accounts, while over 75% of all these deposit complaints were for credit union share drafts.
The CFPB just released its latest monthly consumer complaints snapshot, and according to the report, consumers continue to face problems with mortgage servicing, particularly during certain circumstances, such as when they apply for a loan modification to avoid foreclosure.
“Despite strong protections that have been put in place to protect homeowners, this month’s complaint report shows consumers are still having problems when dealing with their mortgages,” said CFPB Director Richard Cordray. “The Bureau will continue to work to make sure that consumers are being treated fairly on their mortgage issues.”
One of the complaints submitted against credit unions recorded in the Moebs report, and shared with CUToday.info, reflects an issue with a loan modification. The member indicates he lost his job, became worried about future payments, and asked the loan to be placed into the HARP program.
HAMP Not HARP
The member explained that after speaking with the credit union the loan was placed into the HAMP program (Home Affordable Modification Program) and that he was not made aware of the difference.
“Unknowingly, I was put into the HAMP program, and was told to make reduced payments for a trial period. I did this, not knowing any better,” the complaint stated. “About five months later, I get a package in the mail stating we had been accepted into the program, and our mortgage payment would be about $120 lower than the original monthly payment, and the loan would be extended for 40 years.”
The member did not want to pay on a mortgage for that length of time and opted out of the program.
“By this time I had been notified that this was HAMP not HARP, and because I was making reduced payments, I now had a history of late payments and was then no longer eligible for HARP,” the complaint stated.
Other member complaints Moebs $ervices shared with CUToday.info: A member became upset with the credit union over debt collection practices that included calling family members who were not on the loan; mortgage closing costs differed between the initial agreement and when the deal was signed; excessive and inaccurate money transfer fees; and failure to resolve a fraudulent credit card charge.