Ken Sweet, Associated Press
NEW YORK (AP) — The Navy Federal Credit Union will no longer have to refund $80 million to military personnel and women to illegally charge current claims on their accounts after the Donald-led Consumer Financial Protection Agency moves to dismiss the lawsuit.
This is the latest example of how the Trump-led CFPB is revoking much of the work it has done under President Biden, even if bad actors agree to provide relief and compensation to victims.
The case dates back to the second half of 2024 and deals with an issue known as “approved aggressive overdraft fees.” This happens when the bank first approves a debit card transaction, but within a few days the previous transaction is resolved and the customer charges overdraft fees if the customer’s bank account is insufficient. The Navy Federation has been known to allow overdraft fees of these types between 2017 and 2022, and later suspended practices and refunded some affected customers.
Under the previous settlement, the Navy Federation would have had to pay the CFPB a $15 million fine and refund $80 million in overdraft fees that it had been illegally paid. At the time, the Navy Federation said “we are fully cooperating with the CFPB investigation and will continue to comply with all applicable laws and regulations as we always have and as we think we did here.”
The CFPB gave little reason to withdraw the consent order. Under Russell Vert, the president’s Budget Director, who is also the director, the department has withdrawn about half a dozen consent orders, ending other settlements that the department had previously reached financial services companies. The withdrawn order states that the Navy Federation has agreed to withdraw the order.
A Navy Federal spokesman did not immediately respond to comments on whether they plan to continue with customer refunds, even though credit unions no longer need to do so.
The Navy Federation is the largest credit union in the country, with around 14 million members and $180 billion in assets. If the Navy Federation is considered a traditional bank, it will be the 24th largest bank in the country by its assets.
Original issue: July 1, 2025, 4:17pm EDT
