The Consumer Financial Protection Bureau (CFPB) took action against Navy Federal Credit Union for charging illegal overdraft fees through its “Optional Overdraft Protection Service,” known as “OOPS.” The bureau ordered Navy Federal to pay $95 million in redress and penalties as part of the largest total the bureau has ever obtained from a credit union.
Navy Federal customers were charged $20 for most overdraft transactions, netting the credit union nearly $1 billion in overdraft fees from 2017 to 2021, according to a CFPB press release.
“Navy Federal illegally harvested tens of millions of dollars in junk fees, including from active duty servicemembers and veterans,” CFPB Director Rohit Chopra said. “The CFPB’s work to rid the market of illegal junk fees has saved American families billions of dollars.”
The CFPB is ordering Navy Federal to refund more than $80 million to consumers, stop charging illegal overdraft fees, and pay a $15 million civil penalty to the CFPB’s victims relief fund.
“Navy Federal fully cooperated with the CFPB’s investigation and we will continue to comply with all applicable laws and regulations, just as we always have and as we believe we did here,” Navy Federal said in a statement. “Nevertheless, this settlement enables us to focus on serving our members and their families. As a member-owned, not-for-profit credit union, we are focused on putting our members first.”
Dodd Frank Update will have more details about this matter coming soon.