<human>: Can you condense the text into a few key points?

Here's my story:

Two months ago, I submitted an application for an auto loan through my credit union. I did not have a specific car picked out, but I wanted to be sure of my options before I wasted my time shopping. After providing documents such as proof of income, I received a "pre-approval certificate" which explicitly *did not* guarantee my loan would be funded. According to the certificate, once I found a car I wanted, the credit union would decide whether to give me the "80% of the value up to a maximum of $6k". The car could be used or new, and I could go through a dealer or a private seller, though the credit union reserved the right to determine whether my choice was worthy of a loan. I had 90 days to decide before my pre-approval expired.

Over the next few weeks, I searched for cars online; I was willing to wait if it meant finding the perfect deal. Luckily, I did wait; a month ago my circumstances changed, and I could no longer afford a car. Last week, I contacted the credit union and claimed that I was no longer in need of the loan.

The reply I got was that they would "cancel my request" but that I would "receive an adverse action, of the cancellation."

Is this the law (I live in California)? I never took the money; they never even committed to giving it to me. I never signed any papers agreeing to taking the loan. I wish I could take the money and just hand it right back, but they need proof of an auto purchase, and I simply can't afford to make one after last month.

How do I not get screwed?
<bot>: Got pre-approved for a loan, didn't want it anymore, now my credit suffers because I "canceled".