SAN DIEGO–Despite a request by Sen. Elizabeth Warren (D-MA) that the Marine Corps pause a renewal of a contract with Frontwave Credit Union until its overdraft fees can be reviewed, the two organizations have renewed the agreement.
As the CU Daily reported here , Warren sent a letter last week in which she said the contract should not be signed until action could be taken related to what she alleged were Frontwave’s “abusive practices.”
But that contact has now been signed, according to KPBS.
The $1.4-billion, Oceanside, Calif.-based Frontwave CU, which primarily serves Marines at the Marine Corps Recruit Depot, many of them young, was the subject of significant scrutiny and media reporting in 2024 after data compiled by the state of California showed that in 2022 it had collected approximately $8 million in overdraft penalties, or nearly 12% of its overall revenue. That figure was about triple the average among all state-chartered credit unions, according to a review conducted as part of KPBS investigation.
Approximately 20,000 Marine recruits go through boot camp at the San Diego Marine Corps Recruit Depot (MCRD) every year, noted KPBS, which said that in order to process their paychecks the Marine Corps has directed many of those recruits into Frontwave Credit Union.
Letter to Defense Secretary
In a letter to Defense Secretary Pete Hegseth, which cites the KPBS reporting, Warren requested the U.S. Department of Defense (DOD) delay renewing Frontwave’s contract with the Marine Corps until the DoD can ensure servicemembers “have adequate protections in place to prevent excessive overdraft fees and other abusive practices.”
“New information and documents I obtained as part of my investigation of Frontwave Credit Union reveal the Department of Defense does not adequately protect service members from exorbitant overdraft fees in its contracting process,” the letter reads. “I ask that the DoD act quickly to modify and improve its agreements with Frontwave and other credit unions and banks to ensure that financial institutions do not take advantage of service members, their families, and others serving on military bases. This is a particularly urgent matter, as I have learned that Frontwave’s agreement with DoD may soon be renewed.”
The contract went up for review in March.
KPBS said it confirmed that the contract has been renewed, but that a Marine Corps spokesperson had declined to provide a copy of the new agreement.
