CFPB dismisses case against Navy Federal Credit Union

The CFPB has dismissed its case against Navy Federal Credit Union alleging it charged illegal overdraft fees.

In November, the bureau ordered Navy Federal to refund more than $80 million to consumers, stop charging overdraft fees it deemed illegal, and pay a $15 million civil penalty to the CFPB’s victims relief fund. Navy Federal maintained that its overdraft services complied (and continue to comply) with all applicable laws and regulations.

According to the CFPB’s filing terminating the consent order, the bureau is also waiving any alleged noncompliance.

America’s Credit Unions has long opposed the CFPB using consent orders in lieu of actual regulation to target specifics products or services, and is encouraged that current bureau leadership supports clear rules of the road. It also continues to support the ability of consumers to opt into overdraft protection, which is heavily regulated, and successfully advocated for the CFPB to overturn its rule capping overdraft fees at $5. Data from the Federal Reserve Bank of New York research found that 84% of overdraft users understood the cost in using overdraft services.

The organization has written numerous letters to legislators and regulators on the importance of allowing these services to be offered, noting that restricting them will ultimately lead consumers to less-regulated or predatory financial service providers.