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Less than eight months after ordering Navy Federal Credit Union to pay more than $95 million in penalties and consumer refunds for illegal surprise overdraft fees, the CFPB has officially terminated its consent order against the nation’s largest credit union.
In a document filed July 1, the CFPB ended the consent order with little explanation in the two-page document. The original order, filed Nov. 7, 2024, stemmed from findings that Navy Federal charged members overdraft fees on debit card transactions even when their accounts showed sufficient funds at the time of purchase. The fees were later assessed if accounts had insufficient funds at settlement, sometimes days after a transaction.
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The CFPB also found Navy Federal failed to disclose cutoff times for incoming transfers, leading members to believe funds from person-to-person payments like Zelle or PayPal were immediately available to cover transactions, when in fact those funds wouldn’t post until the next business day. This resulted in additional unanticipated overdraft fees.
As part of the 2024 consent order, Navy Federal was required to pay $80 million in refunds to consumers and a $15 million civil penalty, while also halting these overdraft practices permanently. Navy Federal began issuing refunds in early 2023, even before the consent order was finalized.
In a statement, a Navy Federal spokesperson said the decision to terminate the order was the right thing to do.
“Navy Federal’s commitment to prioritize and protect our members is core to who we are. Our overdraft program allows our members to make necessary, everyday purchases without going into long-term debt or turning to payday lenders. Navy Federal complied with all applicable laws and regulations at the time and continues to do so. We firmly believe the CFPB’s decision to terminate the order was appropriate.”
CFPB Acting Director Russell Vought, who signed the July termination order, noted that the Bureau also waived any alleged non-compliance with the original consent order. This marked the formal close of the regulatory action.
“This case was about holding Navy Federal accountable for practices that harmed its own members — many of whom are service members and their families,” the CFPB said in its original enforcement announcement. “These practices have no place in the financial services marketplace.”
With the termination, Navy Federal has exited federal oversight related to this case.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
