VyStar Credit Union's Thomasville, Ga., branch. Credit/VyStar CU
The CFPB officially terminated its consent order against VyStar Credit Union this week, marking the end of a regulatory investigation into the credit union’s disastrous 2022 digital banking system rollout. The CFPB said VyStar fulfilled key conditions of the enforcement order, including paying a $1.5 million civil penalty and refunding fees to affected members.
The case stemmed from VyStar’s failed attempt to launch a new online and mobile banking platform on May 13, 2022. Initially described to members as a brief, two-day outage, the system was plagued by extended downtime and functionality issues that persisted for weeks. Tens of thousands of frustrated members took to social media to voice complaints as they lost access to essential banking services.
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At the time, then-CFPB Director Rohit Chopra called the conversion “botched” and said VyStar’s senior leadership “bungled the credit union's rollout of a new banking system and left customers stranded without online access to their accounts.” The Bureau’s investigation concluded that VyStar ignored red flags and moved forward with a flawed launch that violated the Consumer Financial Protection Act of 2010.
The 2024 consent order required VyStar to create contingency plans for future tech upgrades, bolster customer service, and reimburse all members for fees and third-party costs tied to the outage. After last year’s announcement, former NCUA Chairman Todd Harper also criticized the credit union, saying its due diligence “fell far short” of what was needed for a successful system conversion.
VyStar, headquartered in Jacksonville, Fla., and holding $14 billion in assets, said it worked transparently with regulators and took independent actions to support its members. “VyStar reimbursed or waived all VyStar fees until services were restored,” the credit union said in a prepared statement, adding that it paused credit reporting, extended contact center hours, and maintained ATM and branch access during the disruption.
Now serving nearly one million members across Florida and Georgia, VyStar said it has invested heavily in infrastructure improvements since the incident. “These comprehensive improvements were independently identified and implemented and have resulted in exceptional service reliability,” the credit union stated.
The Bureau, citing VyStar’s compliance with the consent order and its efforts to audit and refund members appropriately, terminated the order and waived any alleged non-compliance. Last fall, VyStar CEO Brian Wolfburg expressed hope that the credit union’s enhanced platforms will “reassure members that we are dedicated to being a responsive organization and emerging from this experience better and stronger.”
In a statement to CU Times, America’s Credit Unions Chief Advocacy Officer Carrie Hunt said, "Credit unions strive to meet their members' needs by offering the highest quality, affordable and competitive products and services. Although sometimes issues arise, credit unions always put their members’ best interest first. We remain committed to right size regulation, and we appreciate the CFPB closing this matter with Vystar."
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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.
