Saturday, November 23, 2024
Todd M. Harper, NCUA Chairman | National Credit Union Administration (NCUA)

CFPB orders Navy Federal Credit Union to pay $95 million over unfair fee practices

National Credit Union Administration Chairman Todd M. Harper issued a statement regarding the Consumer Financial Protection Bureau's (CFPB) settlement with Navy Federal Credit Union. The settlement addresses unfair practices known as authorize positive, settle negative (APSN), which led to overdraft fees that affected consumers.

"Navy Federal’s authorize positive, settle negative practices and the subsequent charging of overdraft fees were not only unfair, but they also caused substantial harm to consumers," Harper stated. He emphasized that many consumers were unaware of Navy Federal's complex transaction posting processes, which could result in unexpected overdraft fees.

Harper highlighted that such practices contradict the credit union system's mission to meet members' credit and savings needs, particularly those with modest means. "Credit union member-owners have the right to know about any fees and practices that affect their hard-earned savings and credit unions owe it to their members to be transparent," he said. He added that the settlement emphasizes the need for fair treatment of consumers and protection from predatory business practices.

The CFPB has ordered Navy Federal Credit Union to reimburse members over $80 million and pay a $15 million penalty to the CFPB’s victims relief fund.

The NCUA is an independent federal agency responsible for regulating federal credit unions and operates the National Credit Union Share Insurance Fund. This fund insures deposits for more than 135 million account holders across federal and most state-chartered credit unions.

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