By Associated Press’s Ken Sweet
NEW YORK (AP) — The Consumer Financial Protection Bureau, led by President Donald Trump, has moved to dismiss the case against Navy Federal Credit Union, which was required to return $80 million to military members for unlawfully charging them overdraft fees on their accounts.
It is the most recent illustration of how the Trump-led CFPB is reversing a large portion of the work it completed under President Biden, even when the wrongdoers consented to compensate and offer restitution to victims.
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Authorized positive overdraft fees are a problem that arises when a bank first authorizes a debit card transaction but then charges the customer an overdraft fee when the transaction settles, usually a few days later, and there are not enough funds in the customer’s bank account. The case dates from late 2024. Between 2017 and 2022, Navy Federal was discovered to have approved these kinds of overdraft fees; the company subsequently discontinued the practice and issued refunds to some affected consumers.
Navy Federal would have been required to reimburse $80 million in overdraft fees that were unlawfully paid and pay a $15 million fine to the CFPB as part of its prior settlement. As we always have and as we think we did here, Navy Federal stated at the time that it fully cooperated with the CFPB’s inquiry and that it would continue to abide by all applicable laws and regulations.
The CFPB’s justification for rescinding the consent decree was minimal. The agency has terminated other agreements it had made with financial services firms and revoked about six consent orders under the leadership of Russell Vought, the president’s budget director and acting head of the bureau. Navy Federal agreed to have the order revoked, according to the withdrawn order.
A Navy Federal representative did not immediately answer a question about whether the credit union intended to continue giving refunds to its members even though it was no longer required to.
With around 14 million members and $180 billion in assets, Navy Federal is by far the biggest credit union in the nation. By assets, Navy Federal would rank as the 24th largest bank in the nation if it were a typical bank.
