Eight Democrats in the Senate have expressed “profound alarm” about the Consumer Financial Protection Bureau’s decision to terminate a consent order involving Navy Federal Credit Union’s alleged overcharging of overdraft fees.
Under the CFPB’s original order issued in November 2024, Navy Federal agreed to pay at least $80.2 million in restitution to its members who were allegedly charged overdraft fees on their accounts unfairly. The CFPB issued a termination notice this month for that November order, without stating a reason.
Neither Navy Federal nor the CFPB responded to questions from Military Times about how much restitution — if any — had been provided to members of the credit union. Its membership is mostly made up of service members, veterans and their families.
The settlement reached in November 2024 wasn’t clear about firm deadlines for paying restitution.
CFPB also didn’t respond to questions about why the consent order was terminated.
In a letter Wednesday to Russell Vought, President Donald Trump’s budget director and the acting director of the CFPB, the eight senators asked for an explanation for the termination. Among other requests for information, they want to know how much of the funds for restitution remains unpaid to affected consumers. They want answers by July 30.
CFPB’s July 1 decision to terminate the consent order “appears to prioritize financial institutions over the very service members the Bureau is charged with protecting,” the senators wrote. “The restitution funds intended to compensate harmed consumers are now at risk of being withheld.”
The original consent order alleged that Navy Federal charged customers surprise overdraft fees on certain ATM withdrawals and debit card purchases, even when customers’ accounts showed sufficient funds at the time of the transactions. In addition to the $80.2 million in restitution, CFPB ordered Navy Federal to pay a $15 million civil penalty to the CFPB’s victims relief fund, and to stop charging illegal overdraft fees.
In that consent order, CFPB stated Navy Federal officials neither admitted nor denied any of the CFPB’s allegations.
In a statement to Military Times, Navy Federal officials defended their overdraft program and said they supported CFPB’s latest decision.
“Navy Federal complied with all applicable laws and regulations at the time and continues to do so,” Navy Federal said in the statement. “We firmly believe CFPB’s decision to terminate the order was appropriate.”
They stated their overdraft program “allows our members to make necessary, everyday purchases without going into long-term debt or turning to payday lenders.”
Navy Federal is the largest credit union in the U.S., serving active-duty military, veterans, Department of Defense civilian employees and their families, of all branches of service. The credit union has nearly 15 million members and $190 billion in assets, according its website.
In 2024, the credit union took over the operation of the DOD’s Community Bank locations located on 60 overseas military installations.
In the November consent order, CFPB stated that starting in 2017, Navy Federal received complaints from consumers expressing anger and confusion about overdraft fees charged, even though their available balances were high enough to cover the transactions at the time they were authorized.
Navy Federal officials began investigating some of the overdraft issues as early as June 2018 and made changes to their overdraft policies starting in September 2020, according to the November order.
The senators, led by Sen. Ruben Gallego, D-Ariz., noted that on April 16, CFPB pledged in a press release to “focus its enforcement and supervision resources on pressing threats to consumers, particularly service members and their families and veterans.”
But the senators contend the abrupt reversal of the consent order suggests the credit union’s “stated commitment to service members is little more than lip service.”
In addition to Gallego, the letter was signed by Sens. Angela Alsobrooks, D-Md., Catherine Cortez Masto, D-Nev., Tammy Duckworth, D-Ill., Chris Van Hollen, D-Md., Raphael Warnock, D-Ga., Elizabeth Warren, D-Mass., and Ron Wyden, D-Ore.
The senators asked how the action to terminate the consent order aligns with CFPB’s publicly stated priorities.
Among other questions, they asked how much of the $15 million originally designated for the CFPB victims relief fund was actually deposited. They also want to know whether affected consumers were notified about the termination of the consent order and that restitution requirements might be altered or withdrawn.
Democrat lawmakers and advocacy groups have expressed concerns about the Trump administration’s moves to cut back on CFPB’s work. In the nearly six months since the administration has had control of the bureau, its leadership has focused almost exclusively on rolling back any punishments, fines and penalties made against companies during the Biden administration, The Associated Press reported.
Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book "A Battle Plan for Supporting Military Families." She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.
