---
title: Consent Order for Surprise Overdraft Fees
description: CFPB's latest Consent Order mandates refunds and penalties for unlawful overdraft fees, highlighting issues with debit card transactions, ATM withdrawals, and peer-to-peer payment delays.
---

[Banker's Compliance Consulting Blog ](https://blog.bankerscompliance.com/en)

# [Consent Order for Surprise Overdraft Fees](https://blog.bankerscompliance.com/en/consent-order-for-surprise-overdraft-fees)

 Written by [Amy Kudlacek](https://blog.bankerscompliance.com/en/author/amy-kudlacek) | Nov 15, 2024 10:11:56 PM

The CFPB has issued another [Consent Order](https://www.consumerfinance.gov/enforcement/actions/navy-federal-credit-union-overdraft-2024/) related to “surprise” overdraft fees and highlighted two specific areas where unlawful overdraft fees were applied:

1. Overdraft fees were charged on debit card transactions and ATM withdrawals that were authorized when there were sufficient funds in the account but settled when there were insufficient funds in the account.
2. Officials also failed to disclose cutoff times it had implemented for payments received through person-to-person services, such as Cash App or Zelle, resulting in additional “surprise” overdraft fees. Not only was there a delay in posting the funds, but the cutoff time was ever-changing, making it extremely difficult to anticipate for those relying on the funds.

The Consent Order requires over $80 million in refunds to those who were wrongfully charged and includes a $15 million civil money penalty. Additionally, the credit union is prohibited from charging overdraft fees in cases where there are insufficient funds at the time of settlement despite there having been sufficient funds at the time of the transaction or from delays in posting funds from peer-to-peer payment networks.

The Authorize Positive, Settle Negative issue is nothing new. In fact, back in April 2023, both the [OCC](https://www.occ.treas.gov/) and [FDIC](https://www.fdic.gov/) issued guidance on the potential [UDAAP](https://www.consumerfinance.gov/compliance/supervision-examinations/unfair-deceptive-or-abusive-acts-or-practices-udaaps-examination-procedures/) concerns associated with such practices. We covered this in the June 2023 edition of our magazine, *Banking on BCC. *If you’re unsure of where you stand with this issue, we would encourage you to review your practices, as it doesn’t seem to be going away.

Published  
2024/11/15

 

[View full post](https://blog.bankerscompliance.com/en/consent-order-for-surprise-overdraft-fees)

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