(Bloomberg) -- Navy Federal Credit Union was ordered to pay more than $95 million in refunds and penalties after a US regulator accused the firm of charging customers illegal overdraft fees.
The Consumer Financial Protection Bureau told the Vienna, Virginia-based not-for-profit firm — the largest credit union in the US, with more than $180 billion of assets and 14 million members — to refund more than $80 million to consumers and pay a $15 million civil penalty to the CFPB’s victims relief fund, according to a statement Thursday.
From 2017 to 2022, Navy Federal charged customers unexpected overdraft fees on some ATM withdrawals and debit-card purchases even when their accounts had sufficient funds at the time of the transactions, the CFPB said. Through its Optional Overdraft Protection Service — known as OOPS — Navy Federal charged customers $20 for most overdraft transactions, the CFPB said.
“Navy Federal illegally harvested tens of millions of dollars in junk fees, including from active-duty service members and veterans,” CFPB Director Rohit Chopra said in the statement.
Navy Federal said in a statement that it fully cooperated with the CFPB’s investigation and “will continue to comply with all applicable laws and regulations, just as we always have and as we believe we did here.” Still, the credit union said, the settlement “enables us to focus on serving our members and their families.”
As part of the enforcement action, Navy Federal can no longer charge overdraft fees resulting from insufficient funds at the time of processing despite sufficient funds when the transaction happened, or from delayed posting of funds received through peer-to-peer payment networks, the CFPB said.
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