The National Credit Union Administration (NCUA) Chairman Todd M. Harper and Board Member Tanya F. Otsuka have commented on the Consumer Financial Protection Bureau's (CFPB) recent enforcement action against VyStar Credit Union. This follows a joint investigation by the NCUA and CFPB into VyStar's violations of the Consumer Financial Protection Act.
Chairman Harper remarked, "Credit unions must prioritize their members, yet VyStar’s due diligence fell far short of what was required for completing a successful conversion of the credit union’s mobile and online banking platforms." He added that these management failures led to consumer harm over several months and posed various risks, including strategic, reputational, legal, and compliance issues.
Board Member Otsuka stated, "This is a victory for consumers harmed by VyStar’s irresponsible actions," emphasizing that credit unions should adhere to high standards of member protection. She expressed pride in the NCUA's efforts to hold VyStar accountable.
VyStar's management and governance failures resulted in a banking platform outage and limited functionality over an extended period, causing significant injury to consumers. Members faced late fees and difficulties accessing funds during the transition to a new platform.
The CFPB has ordered VyStar to compensate all affected credit union members for previously uncompensated fees caused by the system outage. Additionally, VyStar must improve its system update processes and pay a $1.5 million civil penalty to the CFPB’s victims relief fund.
VyStar Credit Union, previously known as JAX Navy Federal Credit Union, is headquartered in Jacksonville, Florida. It operates 70 branches in Florida and 10 branches in Georgia with approximately $14.75 billion in total assets as of June 30, 2024, serving 984,565 members.
The NCUA is an independent federal agency responsible for regulating federal credit unions in the United States. It manages the National Credit Union Share Insurance Fund which insures deposits for more than 135 million account holders across federal credit unions.
For media inquiries: Joe Adamoli at JAdamoli@ncua.gov or call 703-518-6572.
