The Consumer Financial Protection Bureau (CFPB) has taken action against Navy Federal Credit Union, accusing the institution of charging illegal overdraft fees from 2017 to 2022.
The credit union imposed unexpected fees on ATM withdrawals and debit purchases, even when account balances initially appeared to have sufficient funds. As a result, the CFPB is requiring Navy Federal to refund over $80 million to affected customers, halt the practice of charging these fees, and pay a $15 million penalty.
Navy Federal, the largest credit union in the U.S., serves military members, veterans, and Department of Defense employees, with over $171 billion in assets and 13 million members. The credit union charged $20 per overdraft through its “Optional Overdraft Protection Service” (OOPS) and collected nearly $1 billion in fees from 2017 to 2021.
The CFPBās action mandates refunds for improperly charged fees, bans fees for transactions that initially showed sufficient funds or when payments were delayed, and requires the payment of a $15 million fine to the CFPBās victims relief fund.
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