Banking and Finance Law Daily Wrap Up, CONSUMER FINANCIAL PROTECTION BUREAU—Administration condemned for letting Navy Federal Credit Union off the hook, (Jul 17, 2025)

By Carrie DeLeon

The senators want answers as to why the Consumer Financial Protection Bureau dismissed an order requiring NFCU to refund $80 million to consumers who were charged illegal overdraft fees.

A group of senators, led by Sen. Ruben Gallego (D-Ariz.), have sent a letter to Consumer Financial Protection Bureau (CFPB) Acting Director Russell Vought condemning the Trump Administration for terminating an order against Navy Federal Credit Union (NFCU) and effectively excusing the credit union, which largely serves serve members and veterans, from accountability from charging illegal overdraft fees to their members. The lawmakers are asking Acting Director Vought provide answers to a list of questions regarding the decision terminate the order.

“This decision appears to prioritize financial institutions over the very servicemembers the Bureau is charged with protecting. The restitution funds intended to compensate harmed consumers are now at risk of being withheld. This reversal is particularly troubling given your Bureau’s pledge less than three months ago to prioritize protections for military consumers,” the senators write in their July 16 letter, which was cosigned by Sens. Catherine Cortez Masto (D- Nev.), Chris Van Hollen (D-Md.), Ron Wyden (D-Ore.), Tammy Duckworth (D-Ill.), Raphael Warnock (D-Ill.), Elizabeth Warren (D-Mass.), and Angela Alsobrooks (D-Md.).

In 2024, CFPB found that between 2017 and 2022, NFCU charged overdraft fees on ATM withdrawals and debit card purchases, even when accounts showed sufficient funds, the senators wrote in a July 16 letter. In response, the CFPB issued a consent order requiring NFCU to pay a total of $95 million in penalties and restitution (see Banking and Finance Law Daily, Nov. 8, 2024).

The CFPB, however, on July 1 formally terminated its consent order against Navy Federal Credit Union over allegedly unfair overdraft fee practices. The original consent order accused Navy Federal of charging overdraft fees to members who had sufficient available balances at the time of transaction authorization but later fell short when transactions settled, including funds from person-to-person services like PayPal or Cash App. An $80 million consumer redress requirement was included in the initial agreement. Navy Federal was also directed to pay $15 million to the CFPB’s victims relief fund.

Acting Director Vought gave no reason for terminating the consent order. The senators said that “at a minimum, the public and Congress deserve answers.”

“As former CFPB officials have noted, this decision raises serious concerns about whether the Bureau is still capable – or even willing – to fulfill its legal mandate,” the senators said.

They further point out that on April 16, the Bureau “pledged to ‘focus its enforcement and supervision resources on pressing threats to consumers, particularly service members and their families and veterans.’ And yet, your abrupt reversal of this consent order suggests your stated commitment to servicemembers is little more than lip service. The CFPB’s mission is to protect consumers from unfair, deceptive, or abusive practices and to hold lawbreaking companies accountable. Under your direction, it is doing neither.”

The senators are requesting Acting Director Vought provide answers to several questions no later than July 30. Senators want to know, among other things, how much of the $80.6 million in restitution remains unpaid to affected consumers; whether the affected consumers been notified that the consent order was terminated; and “what was the full legal and factual basis for terminating the consent order?”

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