WASHINGTON–Sen. Elizabeth Warren (D-MA) is keeping up her pressure on Frontwave Credit Union and its overdraft fees, this time calling for the Department of Defense to investigate the arrangement between the credit union and the U.S. Marine Corps.
Oceanside, Calif.-based Frontwave, which was chartered to serve the Marines and Camp Pendleton, has been the subject of scrutiny by both members of Congress—a half-dozen of whom demanded answers to questions about the fees it charges—and the media—in particular KPBS.
In turn, as CUToday.info reported here, Frontwave Credit Union CEO Bill Birnie responded to the congressional inquiry with a long letter outlining its practices, fees, and educational efforts.
Senator Unsatisfied
But that has not satisfied Warren.
“Frontwave confirmed that it charged service members expensive and abusive overdraft fees for years, which run up to $100 per day,” Warren said in a statement. “The Department of Defense should review its agreement with Frontwave to make sure that service members are not being ripped off.”
Warren, who has painted the credit union as victimizing young Marines, wants more information on the overdraft fees collected by Frontwave (according to information collected by California’s state regulator, Frontwave had $7.8 million in overdraft fee income in 2022), saying she is not happy with the response provided.
“The credit union still owes Congress and the public answers about exactly how much it collects each year from these tactics,” Warren said in a statement that was quoted by KPBS.
‘Key Questions Unanswered’
KPBS alleged in its reporting that Birnie’s letter to Congress “left a number of…key questions unanswered. For example, it ignored a request from the lawmakers for the total dollar amount of overdraft fees paid by service members. The company also failed to provide some of the documents requested by Congress members.”
In addition, KPBS said Frontwave did not respond to the congressional response for a narrative explanation of how Frontwave first secured an agreement with the Marines more than 25 years ago that “guarantees Frontwave thousands of new customers each year.”
The latter is a reference to new recruits who arrive at Camp Pendleton.
‘Dubious Numbers’ Alleged
KPBS additionally stated the Frontwave letter “at times relies on dubious numbers,” especially related to its foundation, which had charitable donations last year that totaled a “mere” $32,500, which KPBS said it determined through its financial statements.
“That represents less than half of 1% of the $8 million in overdraft fees the company collected in 2022,” KPBS said.
The news outlet also questioned the “hours of instruction” the credit union provides to Marine recruits.