VIENNA, Va. — The CFPB has moved to dismiss a case that would have required Navy Federal Credit Union to refund $80 million to members for allegedly illegally charging overdraft fees.

In a statement, Navy FCU said the CFPB’s move was “appropriate.”

The decision is one of many the CFPB has dismissed or chosen not to enforce under the Trump administration, which has revoked many of its rules and rulings, and largely emptied its headquarters of all its staff.

In 2024 the CFPB ruled against Navy Federal in a case involving so called “authorized positive overdraft fees,” which occur when a financial institution approves a debit card transaction but later charges the consumer an overdraft fee when the earlier transaction settles. 

As the CU Daily has reported, including here today, numerous credit unions have been targeted by lawsuits making similar allegations, and have paid multi-million-dollar settlements.

The Allegation

The CFPB alleged the $190-billion Navy Federal, had authorized such transactions that led to overdraft fees between 2017 and 2022. The Bureau said Navy FCU later stopped the practice and refunded some of its members.

Prior to the dismissal of the case, Navy Federal would have been required to pay a $15 million fine to the CFPB and to refund $80 million to members over the allegedly illegally paid overdraft fees. When it announced the settlement, the CFPB said Navy Federal had “fully cooperated with the investigation and had changed its practices.”

Navy FCU Responds

In a statement cited by the Associated Press and other media outlets, Navy Federal stated, “Navy Federal’s commitment to prioritize and protect our members is core to who we are. Our overdraft program allows our members to make necessary, everyday purchases without going into long-term debt or turning to payday lenders. Navy Federal complied with all applicable laws and regulations at the time and continues to do so. We firmly believe the CFPB’s decision to terminate the order was appropriate.”