The Consumer Financial Protection Bureau (CFPB) dismissed its previously assessed $95 million against Navy Federal Credit Union related to its overdraft program: Optional Overdraft Protection Service (OOPS).
The CFPB previously alleged that members were illegally charged overdraft fees in two ways:
- Members made purchases with their accounts showing enough money to cover the transaction, yet the credit union still charged them overdraft fees if the account had a negative balance once the purchase posted to the account, sometimes days later. Navy Federal collected an average of $44 million a year in these surprise fees. As early as 2015, federal regulators, including the CFPB and the Federal Reserve, began cautioning financial institutions against charging ‘surprise’ overdraft fees.
- Members received money though P2P payment services, such as Zelle, and Navy Federal’s systems showed the money as immediately available to spend. However, the credit union failed to disclose that payments received after 10:00 am Eastern (and later, after 8:00 pm Eastern) wouldn’t actually post until the next business day. Some customers who tried to use this money were then charged overdraft fees. Through this practice, Navy Federal collected at least $4 million in fees.
Now, following the change of Administrations, the CFPB has terminated the previous Consent Order and waives any alleged non-compliance with its terms as of July 1, 2025.