Blog
Consumer Finance Insights
October 31, 2024

CFPB Enters into $1.5 Million Consent Order with Credit Union

On October 31, 2024, the CFPB announced that it had entered into a consent order with a credit union, resolving allegations that the union had ineffectively rolled out a new online banking platform that left consumers without adequate access to basic banking functions, and thereby inflicted financial harm.

In May 2022, the credit union attempted to launch a new online and mobile banking platform with an untested provider, which crashed shortly thereafter and came back online with limited functionality. This impacted members in the following ways: 1) affected their ability to assess fees for failures to make timely payments, 2) restricted their access to funds, and 3) hindered their ability to effectively manage their accounts. The Bureau claimed that rushing to introduce a new platform without sufficient testing and limiting consumer access to money and accounts constituted unfair practices in violation of the Consumer Financial Protection Act (CFPA), as these acts caused financial and non-financial harm to consumers in the form of fees, costs, and inconvenience.

Pursuant to this order, the credit union agreed to pay a $1.5 million civil penalty into the CFPB’s victims relief fund. It also agreed to refund fees to affected consumers and fix the process for updating its systems. ​​

The post CFPB Enters into $1.5 Million Consent Order with Credit Union appeared first on Consumer Finance Insights (CFI).