Latest news with #NavyFederal
Reuters
a day ago
- Business
- Reuters
US consumer watchdog scraps $95 million 'illegal fees' settlement with Navy Federal Credit Union
WASHINGTON, July 1 (Reuters) - The top U.S. watchdog agency for consumer finance this week canceled a $95 million settlement reached last year with Navy Federal Credit Union, a lender officials in the prior administration had accused of illegally charging surprise overdraft fees, according to an order published on Tuesday. In a separate order also published on Tuesday, the CFPB likewise canceled a November action against the nonbank mortgage company Fay Servicing over alleged violations of mortgage servicing laws. The decisions were the latest moves by the U.S. Consumer Financial Protection Bureau to undo cases already concluded by the agency, which President Donald Trump has sought to shrink drastically if not eliminate outright. The CFPB last month exited its corporate monitorship of Bank of America (BAC.N), opens new tab from a 2023 settlement and in May canceled a settlement with Toyota from the same year over allegations of pushing car buyers into unwanted product bundles. Representatives for both companies welcomed the news, saying they were committed to properly serving their customers. "Navy Federal complied with all applicable laws and regulations at the time and continues to do so. We firmly believe the CFPB's decision to terminate the order was appropriate," a spokesperson for the credit union said. The CFPB did not immediately respond to requests for comment. Navy Federal primarily services military service members, veterans, civilian employees of the military and their families. In an internal memo in April, CFPB Chief Legal Officer Mark Paoletta said the agency would focus its reduced resources on "pressing threats to consumers, particularly service members and their families and veterans." In November, the CFPB had ordered Navy Federal to pay $95 million, including $80 million in redress to consumers over allegations the credit union charged depositors whose accounts had sufficient funds at the time of a purchase but fell into the red by the time the charge later posted to their accounts. The CFPB also said depositors paid fees if they drew on funds received via services like PayPal and CashApp and the credit union's system incorrectly told them the funds were immediately available to spend. In an order signed Tuesday, CFPB acting Director Russell Vought said the November order was terminated, including provisions requiring redress payments to allegedly harmed consumers. However the similar order concerning Fay Servicing indicated the CFPB would distribute $3 million in redress payments specific to that case. (This story has been corrected to say that the orders were published on Tuesday, not Wednesday, in paragraphs 1-2)
Globe and Mail
a day ago
- Business
- Globe and Mail
Consumer Financial Protection Bureau dismisses $95M overdraft case vs. Navy Federal Credit Union
NEW YORK (AP) — Navy Federal Credit Union will no longer have to refund $80 million to servicemen and women for illegally charging them overdraft fees on their accounts, after the President Donald Trump-led Consumer Financial Protection Bureau moved to dismiss the case. It's the latest example of how the Trump-led CFPB is undoing much of the work it did under President Biden, even in instances where the bad actors agreed to provide redress and compensation to victims. The case dates from late 2024 and deals with an issue known as 'authorized positive overdraft fees," which happen when a bank initially approves a debit card transaction but later charges the customer a overdraft fee when that earlier transaction settles, typically a couple of days later, and there's insufficient funds in the customer's bank account. Navy Federal was found to authorize these types of overdraft fees between 2017 and 2022, later stopping the practice and refunding some customers who were impacted. Under its previous settlement, Navy Federal would have needed to pay a $15 million fine to the CFPB and refund $80 million in illegally paid overdraft fees. At the time, Navy Federal said it '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.' The CFPB gave little reason for withdrawing the consent order. Under Russell Vought, the president's budget director who is also the acting head of the bureau, the bureau has withdrawn roughly half a dozen consent orders and ended other settlements the bureau previously reached with financial services companies. The withdrawn order says that Navy Federal consented to have the order withdrawn. In a statement, Navy Federal defended its use of overdraft and supported the CFPB's decision. 'Navy Federal's commitment to prioritize and protect our members is core to who we are. Our overdraft program allows our members to make necessary, everyday purchases without going into long-term debt or turning to payday lenders. Navy Federal complied with all applicable laws and regulations at the time and continues to do so. We firmly believe the CFPB's decision to terminate the order was appropriate." Navy Federal is, by far, the largest credit union in the country with roughly 14 million members and $180 billion in assets. If Navy Federal were considered a traditional bank, it would be the 24th largest bank in the country by assets. While Vought has dramatically narrowed the CFPB's mission and scope, the bureau has previously said that financial issues for servicemen and women remain a priority for the bureau. The CFPB did not immediately respond to a request for comment.
Yahoo
a day ago
- Business
- Yahoo
US consumer watchdog scraps $95 million 'illegal fees' settlement with Navy Federal Credit Union
WASHINGTON (Reuters) -The top U.S. watchdog agency for consumer finance this week canceled a $95 million settlement reached last year with Navy Federal Credit Union, a lender officials in the prior administration had accused of illegally charging surprise overdraft fees, according to an order published Wednesday. In a separate order also published Wednesday, the CFPB likewise canceled a November action against the nonbank mortgage company Fay Servicing over alleged violations of mortgage servicing laws. The decisions were the latest moves by the U.S. Consumer Financial Protection Bureau to undo cases already concluded by the agency, which President Donald Trump has sought to shrink drastically if not eliminate outright. The CFPB last month exited its corporate monitorship of Bank of America from a 2023 settlement and in May canceled a settlement with Toyota from the same year over allegations of pushing car buyers into unwanted product bundles. Representatives for both companies welcomed the news, saying they were committed to properly serving their customers. "Navy Federal complied with all applicable laws and regulations at the time and continues to do so. We firmly believe the CFPB's decision to terminate the order was appropriate," a spokesperson for the credit union said. The CFPB did not immediately respond to requests for comment. Navy Federal primarily services military service members, veterans, civilian employees of the military and their families. In an internal memo in April, CFPB Chief Legal Officer Mark Paoletta said the agency would focus its reduced resources on "pressing threats to consumers, particularly service members and their families and veterans." In November, the CFPB had ordered Navy Federal to pay $95 million, including $80 million in redress to consumers over allegations the credit union charged depositors whose accounts had sufficient funds at the time of a purchase but fell into the red by the time the charge later posted to their accounts. The CFPB also said depositors paid fees if they drew on funds received via services like PayPal and CashApp and the credit union's system incorrectly told them the funds were immediately available to spend. In an order signed Tuesday, CFPB acting Director Russell Vought said the November order was terminated, including provisions requiring redress payments to allegedly harmed consumers. However the similar order concerning Fay Servicing indicated the CFPB would distribute $3 million in redress payments specific to that case.
The Hill
a day ago
- Business
- The Hill
Consumer Financial Protection Bureau dismisses $95M overdraft case vs. Navy Federal Credit Union
NEW YORK (AP) — Navy Federal Credit Union will no longer have to refund $80 million to servicemen and women for illegally charging them overdraft fees on their accounts, after the President Donald Trump-led Consumer Financial Protection Bureau moved to dismiss the case. It's the latest example of how the Trump-led CFPB is undoing much of the work it did under President Biden, even in instances where the bad actors agreed to provide redress and compensation to victims. The case dates from late 2024 and deals with an issue known as 'authorized positive overdraft fees,' which happen when a bank initially approves a debit card transaction but later charges the customer a overdraft fee when that earlier transaction settles, typically a couple of days later, and there's insufficient funds in the customer's bank account. Navy Federal was found to authorize these types of overdraft fees between 2017 and 2022, later stopping the practice and refunding some customers who were impacted. Under its previous settlement, Navy Federal would have needed to pay a $15 million fine to the CFPB and refund $80 million in illegally paid overdraft fees. At the time, Navy Federal said it '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.' The CFPB gave little reason for withdrawing the consent order. Under Russell Vought, the president's budget director who is also the acting head of the bureau, the bureau has withdrawn roughly half a dozen consent orders and ended other settlements the bureau previously reached with financial services companies. The withdrawn order says that Navy Federal consented to have the order withdrawn. In a statement, Navy Federal defended its use of overdraft and supported the CFPB's decision. 'Navy Federal's commitment to prioritize and protect our members is core to who we are. Our overdraft program allows our members to make necessary, everyday purchases without going into long-term debt or turning to payday lenders. Navy Federal complied with all applicable laws and regulations at the time and continues to do so. We firmly believe the CFPB's decision to terminate the order was appropriate.' Navy Federal is, by far, the largest credit union in the country with roughly 14 million members and $180 billion in assets. If Navy Federal were considered a traditional bank, it would be the 24th largest bank in the country by assets. While Vought has dramatically narrowed the CFPB's mission and scope, the bureau has previously said that financial issues for servicemen and women remain a priority for the bureau. The CFPB did not immediately respond to a request for comment.
Yahoo
a day ago
- Business
- Yahoo
Consumer Financial Protection Bureau dismisses $95M overdraft case vs. Navy Federal Credit Union
NEW YORK (AP) — Navy Federal Credit Union will no longer have to refund $80 million to servicemen and women for illegally charging them overdraft fees on their accounts, after the President Donald Trump-led Consumer Financial Protection Bureau moved to dismiss the case. It's the latest example of how the Trump-led CFPB is undoing much of the work it did under President Biden, even in instances where the bad actors agreed to provide redress and compensation to victims. The case dates from late 2024 and deals with an issue known as 'authorized positive overdraft fees," which happen when a bank initially approves a debit card transaction but later charges the customer a overdraft fee when that earlier transaction settles, typically a couple of days later, and there's insufficient funds in the customer's bank account. Navy Federal was found to authorize these types of overdraft fees between 2017 and 2022, later stopping the practice and refunding some customers who were impacted. Under its previous settlement, Navy Federal would have needed to pay a $15 million fine to the CFPB and refund $80 million in illegally paid overdraft fees. At the time, Navy Federal said it '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.' The CFPB gave little reason for withdrawing the consent order. Under Russell Vought, the president's budget director who is also the acting head of the bureau, the bureau has withdrawn roughly half a dozen consent orders and ended other settlements the bureau previously reached with financial services companies. The withdrawn order says that Navy Federal consented to have the order withdrawn. A spokesperson for Navy Federal did not immediately respond to comment on whether the credit union planned to keep refunding its customers, despite no longer having to do so. Navy Federal is, by far, the largest credit union in the country with roughly 14 million members and $180 billion in assets. If Navy Federal were considered a traditional bank, it would be the 24th largest bank in the country by assets.
