WASHINGTON–A number of Democratic senators are expressing “profound alarm” and said they want some answers after the CFPB dropped its case against Navy FCU for allegedly charging millions of dollars in illegal overdraft fees.
As the CU Daily reported here, the CFPB has moved to dismiss a case that would have required Navy Federal Credit Union to refund $80 million to members and to pay a $15 million fine.
“This decision appears to prioritize financial institutions over the very service members the bureau is charged with protecting,” the five Democratic senators wrote in a letter that was first reported by Miltary.com.
The letter was sent to the head of the Consumer Financial Protection Bureau, Russ Vought.
‘Little More Than Lip Service’
“Your abrupt reversal of this consent order suggests your stated commitment to service members is little more than lip service,” according to the letter, which was led by Sen. Ruben Gallego (D-AZ), according to Military.com.
The letter was also signed by Sens. Angela Alsobrooks (D-MD), Catherine Cortez Masto (D-NV), Tammy Duckworth (D-IL), Chris Van Hollen (D-MD), Elizabeth Warren (D-MA), Raphael Warnock (D-GA) and Ron Wyden (D-OR).
“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 stated in the letter.
The CFPB Allegations
As the CU Daily reported earlier, in November 2024 the CFPB said that between 2017 and 2021, Navy Federal had collected nearly $1 billion in overdraft fees while “either failing to be transparent or misleading its members about how much money they actually had in their bank accounts, thus making overdrafts more likely.”
The letter asks the CFPB whether any of the $80 million in restitution the world’s largest credit union agreed to pay in the fall of 2024 will actually be paid.
Navy FCU said in an earlier statement to the CU Daily it believes the decision was “appropriate” and it has since changed its practices.