WASHINGTON — The Consumer Financial Protection Bureau defended its decision to terminate an overdraft enforcement order against Navy Federal Credit Union, saying the case exceeded its authority, according to a report released Oct. 27.
The Bureau’s semiannual report to Congress says Navy Federal paid the full $15 million civil penalty but none of the approximately $80 million in required consumer refunds. The report does not say the fine was returned.
The decision came as the Trump Administration rolled back or eliminated numerous penalties assessed by the CFPB under the Biden Administration.
The report argues Navy Federal disclosed the fees three times and required customers to opt in. It says overdraft coverage helps consumers complete essential purchases and avoid other fees or credit damage.
‘Overly Broad Interpretation’
The Bureau says the case relied on an overly broad interpretation of its authority to prohibit unfair, deceptive or abusive acts or practices, reflected in 2022 guidance withdrawn in May 2025. It also raises due process concerns because the conduct preceded that guidance.
The report says refund payments would have come from members’ pockets. It identifies Navy Federal as the exception among terminated orders whose respondents had paid required refunds and penalties, where applicable.
The original Nov. 7, 2024, consent order required more than $80 million in consumer redress and a $15 million penalty. Navy Federal agreed to the order without admitting or denying its findings, apart from jurisdictional facts.
What Original Order Found
That order found the Vienna, Va.-based credit union charged overdraft fees when transactions were authorized with sufficient available funds but settled after balances became insufficient. It also addressed fees associated with delayed posting of incoming payments through services such as PayPal, Cash App and Zelle.
The 2024 order said Navy Federal began refunding the first category of fees in January 2023 and had previously refunded approximately $3.4 million related to delayed incoming payments. Those earlier refunds are separate from the redress required by the consent order.
The termination order, filed July 1, 2025, ended the consent order and waived alleged noncompliance. The October report explains that earlier action; it does not announce a new dismissal.
