On November 7, 2024, the CFPB took action against Navy Federal Credit Union for charging illegal overdraft fees. In a statement, CFPB Director Rohit Chopra said that Navy Federal illegally harvested tens of millions of dollars in junk fees, including from active duty servicemembers and veterans.
Navy Federal Credit Union is the largest credit union in the United States and serves active duty military members, veterans, Department of Defense civilian employees, and their families. According to the CFPB’s investigation, Navy Federal collected nearly $1 billion in overdraft fees from 2017 to 2021. The CFPB found that Navy Federal:
Charged illegal, surprise overdraft fees on purchases made with sufficient funds. Navy Federal charged fees to consumers whose accounts showed sufficient funds when making purchases, only to charge fees when the transactions were later processed.
Charged overdraft fees caused by delayed peer-to-peer payments with undisclosed processing times. The credit union showed incoming payments from services like Zelle, PayPal, and Cash App as available to spend, but failed to disclose that payments received after specific cutoff times would not post until the next business day, while still charging overdraft fees to some customers who attempted to use these apparently available funds.
As a result, the CFPB ordered Navy Federal to:
Pay more than $80 million in consumer redress;
Stop charging certain overdraft fees altogether; and
Pay a $15 million civil penalty to the CFPB’s victims relief fund.
Read the CFPB’s press release here.
The Consent Order can be found here.