Watchdog waives compliance issues and terminates 2024 consent order linked to UDAAP breaches
The Consumer Financial Protection Bureau (CFPB) has ended its oversight of Navy Federal Credit Union, formally terminating a consent order related to the institution’s overdraft fee practices.
In a document published 1 July, the CFPB said it had “waived any alleged non-compliance” with the 2024 order, and that all obligations, including those under Sections IX Paragraphs 67 and 68, were now lifted. The termination effectively closes the Bureau’s enforcement action without further penalties.
Navy Federal, the largest credit union in the US, was issued a consent order in November 2024 after the CFPB found it had violated Sections 1031 and 1036 of the Consumer Financial Protection Act. These provisions prohibit unfair, deceptive, or abusive acts or practices (UDAAP).
At the centre of the Bureau’s concerns were disclosures around the collection of overdraft fees. According to the original action, Navy Federal charged consumers fees in circumstances where disclosures were misleading or insufficient, and in some cases failed to obtain the proper opt-in consent for overdraft programmes.
While no fine was issued, the 2024 order imposed compliance obligations and required operational reforms. These obligations have now been deemed fulfilled or otherwise resolved, according to the latest CFPB filing, which was signed by Acting Director Russell Vought.
The decision arrives amid a wider regulatory and political push in the US to address so-called ‘junk fees’—charges which consumer advocates say disproportionately impact vulnerable households. The CFPB, under both Democratic and Republican leadership, has taken aim at overdraft and non-sufficient funds (NSF) fees in particular, encouraging firms to adopt clearer disclosures or eliminate the charges altogether.
Although the termination suggests Navy Federal has made adequate adjustments to its overdraft fee policies, the CFPB did not detail the specific rationale behind its decision.
With more than 12 million members, many of whom are current or former military personnel, Navy Federal has long held a high-profile position in the US retail banking landscape. The conclusion of this case is likely to be seen as a signal to other financial institutions navigating compliance with federal UDAAP standards amid shifting expectations around transparency and fee structures.
Navy Federal has not publicly commented on the termination of the consent order at the time of publication.
