I also am glad this situation had a relatively quick and painless conclusion for you. I would suggest however that this should not be the ending and that you should leverage your power now to request/demand(nicely) via a supervisor that PenFed send you a corrective action report detailing what went wrong and what they propose to fix the problem so that it does not happen in the future. Usually what happens is that they will "fix" the current problem and then either due to not caring, corporate culture, or the press of other crises carry on business as usual...........which usually means it will happen again, maybe even to you. On rare occasions though, you may actually find a willing and caring ally who will implement a more permanent fix and actually improve matters. All too rare, unfortunately, but it does happen.
You mentioned specifically that this should have not happened bc you still had a CD w/ them. There should be some specific discussion in their report of what happened and how to correct that. btw....your admission of some culpability in not recognizing the city error and 1099INT omission was quite refreshing and will help others.