It’s one of those headlines that makes you double-check your own bank app. Late in 2024, the Consumer Financial Protection Bureau (CFPB) dropped a bombshell: Navy Federal Credit Union, the biggest credit union in the country, was ordered to pay over $95 million. Most of that—about **$80.6 million**—was supposed to go right back into the pockets of members.
Why? Basically, the CFPB said Navy Federal was hitting people with "surprise" overdraft fees they had no way of seeing coming.
But here is where things get weird. If you’ve been waiting for a check in the mail, you might be waiting a long time. In a move that left consumer advocates and even some US Senators pretty shocked, the CFPB basically pulled a U-turn in mid-2025. They terminated the order. They waived the non-compliance. Just like that, the $95 million settlement kinda... evaporated.
The "Surprise" Fees That Started It All
Honestly, the mechanics of how these fees happened are frustratingly simple. Most of us check our "Available Balance" before we swipe a card at a grocery store or gas station. If the app says you have $50 and you spend $40, you’re good, right?
Not according to the original CFPB investigation.
They found that from 2017 to 2022, Navy Federal was using a practice called "authorized-positive, settled-negative" (APSN). You’d have enough money when you swiped (the authorization), but by the time the merchant actually processed the payment days later (the settlement), other transactions might have cleared. Even though the money was there when you made the purchase, Navy Federal would charge a $20 fee because the balance was lower when the transaction finally "posted."
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It wasn't just the swiping, though. There was also a huge issue with peer-to-peer apps like Zelle, Cash App, and PayPal.
People would receive money and see it in their balance. Naturally, they’d spend it. But Navy Federal had these internal "cutoff times"—originally 10:00 AM and later 8:00 PM ET. If that Zelle transfer hit after the cutoff, it wouldn’t officially "post" until the next day. If you spent that money in the meantime? Boom. Another overdraft fee.
Breaking Down the $95 Million
Before the 2025 reversal, the settlement was a record-breaker. It was the largest amount the CFPB had ever squeezed out of a credit union.
- $80.6 Million: This was the restitution fund meant for the "Affected Consumers."
- $15 Million: This was the civil penalty destined for the CFPB’s victims relief fund.
- The "OOPS" Program: This refers to Navy Federal’s "Optional Overdraft Protection Service," which was the primary vehicle for these fees.
The CFPB argued that these fees were "unfair, deceptive, or abusive." Basically, they said regular people couldn't possibly predict when a merchant would settle a transaction, so they couldn't avoid the fees even if they were being careful.
The 2025 Reversal: Why the Deal Collapsed
So, what happened? In July 2025, the CFPB—under new leadership by Acting Director Russell Vought—issued a two-page document that essentially deleted the whole thing.
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The Bureau terminated the consent order. No detailed explanation was given in the filing. They just said they "waived any alleged non-compliance."
Navy Federal, for its part, has always maintained they did nothing wrong. They argued that their overdraft program actually helps members avoid "long-term debt or turning to payday lenders." When the order was dropped, a spokesperson for the credit union called the decision "appropriate."
This didn't sit well with everyone. By late July 2025, Senators like Ruben Gallego were demanding answers. They pointed out that while the CFPB claimed to be focusing on protecting veterans and servicemembers, they were dropping a case against a credit union whose entire membership is built on the military community.
Are You Still Getting a Refund?
This is the question everyone is asking. Here’s the blunt truth: it doesn't look good for the $80 million in restitution.
Because the consent order was terminated, the legal requirement for Navy Federal to pay out that specific $80.6 million is essentially gone. Some experts, like former CFPB enforcement director Eric Halperin, have noted there’s no public evidence that the full redress was ever paid before the reversal happened.
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However, it’s not all a wash. To Navy Federal’s credit, they did start making some changes on their own:
- Self-Correction: Back in January 2023, Navy Federal actually started automatically refunding some of those "authorized-positive" fees.
- NSF Fees: They announced they would eliminate non-sufficient fund (NSF) fees for personal checking accounts starting in early 2025.
- P2P Transfers: They adjusted how they handle those Zelle and PayPal transfers to be more transparent about posting times.
What You Should Do Right Now
If you feel like you were unfairly charged, don't just sit around waiting for a settlement check that might never arrive. You have to be proactive.
Check your past statements. Look for $20 charges labeled "OOPS" or "Overdraft Fee" on days where you knew you had a positive balance when you made the purchase.
Call them up. Honestly, credit unions are generally more member-focused than big banks. If you point out a specific instance of a "surprise" fee, you can ask for a manual reversal. Mention the 2024 CFPB findings regarding "authorized-positive" transactions. It carries weight.
Watch the "Other" Lawsuit. While the $95 million CFPB settlement is effectively dead, there was a separate **$1.72 million class-action settlement** (Stephenson v. Navy Federal) involving the Electronic Funds Transfer Act. That one dealt with how the credit union denied claims of unauthorized transfers. If you had an unauthorized transfer claim denied between October 2022 and August 2025, that's a different pot of money you might actually be able to access.
Set up alerts. Most banking apps—Navy Federal included—let you set a "Low Balance Alert." Set yours to $50 or $100. It gives you a buffer against those weird settlement delays that cause these fees in the first place.
The saga of the Navy Federal settlement is a perfect example of how quickly the regulatory landscape can shift. One year you're looking at a $95 million win for consumers; the next, the paperwork is shredded. Keep a close eye on your "ledger balance" versus your "available balance"—because at the end of the day, the only person looking out for your account balance is you.
Practical Steps for Navy Federal Members
- Switch to "Standard" Overdraft: If you are enrolled in OOPS, ask yourself if you really need it. You can opt for a "Savings Transfer" instead, which moves money from your savings to your checking for a much smaller fee (or no fee) if you overdraw.
- Monitor the 8 PM Cutoff: If you receive money via Zelle or Cash App after 8:00 PM ET, assume that money isn't "safe" to spend until the next business day.
- File a Complaint: If you’re still hitting these fees, you can still file a complaint directly with the CFPB. Even if the big settlement is over, the Bureau still tracks individual complaints to see if a bank or credit union is becoming a "repeat offender."