According to an order issued on Wednesday, the top U.S. consumer watchdog agency canceled this week a $95-million settlement reached with Navy Federal Credit Union last year. Officials in the previous administration had accused them of illegally charging overdraft fees.

In a separate, also published on Wednesday, order the CFPB likewise canceled a Nov. action against nonbank mortgage company Fay Servicing for alleged violations to mortgage servicing laws. These decisions are the latest by the U.S. Consumer Financial Protection Bureau in its efforts to reverse cases that were already completed by the agency. President Donald Trump wants to drastically shrink the agency if not completely eliminate it. Last month, the CFPB ended its corporate monitoring of Bank of America's 2023 settlement. In May, it canceled a settlement reached with Toyota in that same year due to allegations of forcing car buyers into unwelcome product bundles. Both companies' representatives welcomed the news and said they were committed in serving their customers properly.

"Navy Federal has always complied and continues to comply with all laws and regulations applicable at the time. A spokesperson for the creditunion said that they "firmly believed the CFPB decision to terminate the orders was appropriate".

The CFPB didn't immediately respond to comments. Navy Federal's primary customers are military service members, military veterans, and civilian employees in the military, as well as their families. Mark Paoletta, Chief Legal Officer of the CFPB, said in an April internal memo that the agency would concentrate its resources on "pressing concerns for consumers, especially service members and their family and veterans."

The CFPB ordered Navy Federal in November to pay $95 Million, including $80 Million as restitution to consumers, over allegations that the credit union had charged depositors whose account had sufficient funds when they made a purchase, but were depleted by the time their charges appeared on their accounts. The CFPB said that depositors were charged fees if their funds came from services such as PayPal or CashApp, and the credit union system told them incorrectly that the funds would be available for immediate spending.

Russell Vought, acting director of the CFPB, signed an order on Tuesday in which he stated that the November order, including its provisions requiring redress payment to allegedly harmed customers, was canceled. The CFPB had stated in a similar order regarding Fay Servicing that it would pay $3 million to redress the harm caused by the company. (Editing by Stephen Coates).

(source: Reuters)