WASHINGTON—A group of senators is expressing “profound alarm” and demanding answers over what they call the CFPB’s “unprecedented” decision to drop its case against Navy FCU for charging members millions in "illegal" overdraft fees, Military.com reported.
"This decision appears to prioritize financial institutions over the very service members the Bureau is charged with protecting," the Democratic senators wrote in a letter, provided exclusively to Military.com, to the head of the Consumer Financial Protection Bureau, Russell Vought.
As CUToday.info reported, Navy Federal was accused last November of “illegally harvesting tens of millions of dollars in junk fees,” with the credit union reportedly agreeing to refund $80 million to members and pay a $15 million penalty. But on July 1, 2025, the Consumer Financial Protection Bureau abruptly terminated the consent order—without explanation.
"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), Military.com said.
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), Military.com noted.
"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 added in the letter.
Ruben Gallego
Former CFPB officials who spoke to Military.com last week noted that overdraft fees, like the ones that Navy Federal was accused of charging, have become a key part of the business model for banks and credit unions, Military.com said.
Gallego and other senators are asking the CFPB about whether any of the $80 million in restitution that Navy Federal agreed to pay in the fall of 2024 will actually be paid, Military.com said.
Military.com noted that several days after the news outlet asked Navy Federal the same question, a spokesperson for the credit union didn't offer an answer but instead said that they "firmly believe the CFPB's decision to terminate the order was appropriate."
"Navy Federal complied with all applicable laws and regulations at the time and continues to do so," the spokesperson told Military.com.
But the group of senators want something to be done, Military.com said.
"At a time when families are feeling the strain of higher costs and every dollar is hard-earned, the American people -- especially our service members, veterans and military families -- deserve more," they wrote in the letter.
The senators also want the Bureau to answer the following questions by July 30:
- How much of the $80.6 million in restitution remains unpaid to affected consumers?
- What portion of the $15 million originally designated for the Victims Relief Fund was actually deposited? If any amount was withheld or returned, please explain.
- Were affected consumers notified that the consent order was terminated and that restitution obligations may be altered or withdrawn? 4. Was the Bureau’s Office of Servicemember Affairs consulted before the consent order was terminated? If not, why not?
- What was the full legal and factual basis for terminating the consent order?
- What communications or meetings occurred between the CFPB and Navy Federal Credit Union from January 1, 2025, to the present? Please include dates, topics, and participants.
- Who at the CFPB authorized the termination of the consent order, and what internal processes were followed to approve it? Please identify all senior staff, attorneys, and political appointees involved.
- Was any analysis conducted on the impact of this decision on affected consumers or on military households more broadly? If so, please provide a copy of that analysis.
- How does this action align with the CFPB’s publicly stated enforcement priorities, particularly your April 16, 2025, memo referencing protections for servicemembers and veterans?
CFPB Overreach
The Defense Credit Union Council termed the Bureau’s actions against Navy Fed and its OD program CFPB overreach—and more.
"Navy Federal Credit Union has consistently acted in the best interest of its military members,” said DCUC Chief Advocacy Officer Jason Stverak. “The CFPB’s abrupt reversal of its overdraft enforcement action — after publicly accusing the credit union of wrongdoing — confirms what Navy Federal asserted all along: It complied with the law, corrected the issue proactively, and refunded members well before any federal action.”
Stverak said this isn’t just a case of overreach.
Jason Stverak
“It’s a textbook example of regulation by press release,” he told CUToday.info. “The CFPB launched a high-profile campaign, only to withdraw quietly without explanation. That undermines public trust, creates uncertainty for credit unions, and sends mixed messages to military families.
Stverak emphasized that real consumer protection comes from transparency and due process.’
“Not from sudden enforcement actions with shifting legal standards,” he said. “If the CFPB wants to change how overdraft fees are handled, it should follow the rulemaking process — propose a rule, accept public input, and issue clear guidance. That’s how accountable government is supposed to work.”
Stverak reminded that Navy Federal’s overdraft program was optional, clearly disclosed, and designed to help service members avoid worse outcomes like bounced checks or payday loans.
“Vilifying institutions that serve the military—especially when they fix the issue voluntarily—is not only unfair, it’s counterproductive,” he said. “DCUC will continue to stand with credit unions serving our armed forces. We urge the CFPB to stop making policy through headlines and start engaging in constructive, lawful oversight that respects both consumers and the institutions built to serve them.”