- The CFPB issued a consent order to Navy Federal Credit Union to resolve allegations that it charged consumers illegal overdraft fees in violation of the Consumer Financial Protection Act of 2010.
- According to the CFPB, Navy Federal’s “Optional Overdraft Protection Service,” known as “OOPS,” charged consumers nearly $1 billion for overdraft transactions over a five-year period, including when the consumer’s account showed a sufficient balance at the time of the transaction but was insufficient at the time the purchase was posted, as well as when a consumer’s account reflected a sufficient balance due to incoming payments from services like Zelle, PayPal, and Cash App that had not yet actually been posted.
- Under the terms of the consent order, Navy Federal must pay $80 million in consumer redress and $15 million in civil penalties and is prohibited from charging overdraft fees under similar circumstances, among other relief.
- We previously reported on the CFPB’s proposed rule that would update regulatory exceptions for overdraft credit provided by very large financial institutions and limit overdraft fees to small amounts only recovering applicable fees and costs.