VIENNA, Va.— Navy Federal Credit Union will no longer be required to refund $80 million to servicemembers over improperly charged overdraft fees, after the CFPB—under the leadership of the Trump Administration—moved to dismiss the case, according to the Associated Press.
The case, which originated in late 2024, focused on the controversial practice of charging “authorized positive, settled negative” overdraft fees. The $190-billion Navy Federal was found to have used this practice between 2017 and 2022 before halting it and issuing partial refunds to affected members, the AP noted.
Under its previous settlement, Navy Federal would have needed to pay a $15-million fine to the CFPB and refund $80 million in illegally paid overdraft fees. At the time, Navy Federal said it “fully cooperated with the CFPB’s investigation and we will continue to comply with all applicable laws and regulations, just as we always have and as we believe we did here.”
The CFPB gave little reason for withdrawing the consent order, the AP stated.
Under Russell Vought, the president’s budget director who is also the acting head of the Bureau, has withdrawn roughly half a dozen consent orders and ended other settlements the Bureau previously reached with financial services companies. The withdrawn order says that Navy Federal consented to have the order withdrawn.
Navy Federal defended its use of overdrafts and supported the CFPB's decision in a statement in the AP article.
“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."