Gallego Demands Answers from Navy Federal Credit Union on Overdraft Fee Policy

Senator Ruben Gallego (D-AZ) spearheaded a recent letter to Navy Federal Credit Union (NFCU) demanding answers for its apparent abuse of overdraft fees.

According to the letter, Navy Federal illegally charged customers $80 million in surprise overdraft fees between 2017 and 2022, collecting $335 million in overdraft fees alone in 2024.

The Consumer Financial Protection Bureau (CFPB) under the Biden Administration ordered NFCU to pay $80 million in refunds to customers and a $15 million civil penalty for their practices (which were also banned) in 2024.

However, the Trump Administration overturned the order in July, which Sen. Gallego said "has ostensibly enabled Navy Federal to return toward its previous overdraft practices."

"This casts uncertainty on Navy Federal's willingness to ensure the millions of veterans, servicemembers, and DoD staff who were directly harmed by these unlawful acts are treated fairly and made whole," Sen. Gallego added.

As a result, the Arizona Senator demanded answers from Navy Federal on whether and how it would continue to abide by the 2024 order banning its fraudulent overdraft fees, how it would continue to restitute customers harmed by these practices, and to what extent the $80 million refunds and $15 civil penalty have been paid.

Gallego had previously urged the restoration of CFPB funding cut by the Trump Administration at the end of July, saying, "By slashing CFPB funding, it gave scammers and shady businesses a free pass to rip people off."

However, Republicans have argued that the Bureau, due to a lack of Congressional oversight, is being reined in and held accountable by cutting funds.

"For the first time since the passage of Dodd-Frank, Congress is reining in the unaccountable Consumer Financial Protection Bureau and decreasing its mandatory funding cap by 46%, which will save over $2 billion and require the Bureau to be fiscally responsible," said Senator Tim Scott (R-SC).

Similarly, Representative Byron Donalds (R-FL) accused the CFPB of being "a left-wing tool to stifle domestic economic growth, target political opponents, and prevent the development of competition."