Navy Federal Credit Union Class Action Lawsuit, Multiple Settlements Worth $8.2M, Dropped $95M CFPB Case, and Ongoing Discrimination Claims
Navy Federal Credit Union—the nation’s largest credit union with 14 million members—currently faces multiple class action lawsuits totaling over $8 million in active settlements, plus a controversial $95 million overdraft case the CFPB dropped in July 2025. Members who had fraud claims denied between October 2022 and August 2025 can claim compensation from a $1.7 million Electronic Funds Transfer Act settlement, while a separate $5.5 million settlement addresses International Service Assessment fees charged on domestic purchases between August 2016 and March 2023.
The credit union also battles ongoing mortgage discrimination allegations and privacy violations involving AI call monitoring. Here’s what members need to know about eligibility, claim deadlines, and potential compensation.
What Are the Active Navy Federal Class Action Lawsuits?
Navy Federal currently faces four major legal actions affecting different member groups:
1. $1.7 Million EFTA Settlement (Active – Deadline December 18, 2025)
Navy Federal agreed to pay $1.7 million to resolve claims it violated the Electronic Funds Transfer Act by denying members’ claims for unauthorized electronic fund transfers and failing to provide adequate written explanations for those denials.
Who’s Eligible:
- Account holders who submitted claims for unauthorized or fraudulent transactions that Navy Federal denied between October 10, 2022, and August 20, 2025
- Members who requested supporting documents for denied claims but didn’t receive them
Payment Details: The settlement administrator will distribute payments approximately 30 days after the court grants final approval and resolves any appeals. Current members will receive direct account credits, while former members get paper checks.
Critical Deadline: Claims must be filed by December 18, 2025. The final approval hearing is scheduled for February 4, 2026.
2. $5.5 Million ISA Fee Settlement (Completed – Claims Closed)
Navy Federal paid $5.5 million to settle claims it breached agreements by charging International Service Assessment fees on debit card purchases made in the United States. The lawsuit alleged the credit union charged ISA fees for domestic transactions between August 9, 2016, and March 24, 2023.
Settlement Status: The final approval hearing occurred July 24, 2024, with a claim deadline of August 8, 2024. Payments have been distributed. The maximum base payment was $4, with additional payments for members who incurred fees exceeding that amount.
3. $95 Million CFPB Overdraft Case (DROPPED – July 2025)
In November 2024, the CFPB announced Navy Federal had “illegally harvested tens of millions of dollars in junk fees” and ordered the credit union to return $80 million to customers and pay a $15 million fine. However, the CFPB dismissed the consent order in July 2025, with Navy Federal avoiding both the $80 million refund and the civil penalty.
The case centered on “authorized-positive overdraft fees”—charges imposed when accounts showed sufficient funds at authorization but insufficient funds when transactions settled days later. Between 2017 and 2021, Navy Federal collected nearly $1 billion in overdraft fees while allegedly not being transparent about how much money members actually had in their accounts.
Current Status: On July 1, 2025, the CFPB terminated the order and waived any alleged non-compliance. Former CFPB officials called the move unprecedented, noting members will not receive the promised refunds.
4. AI Call Monitoring Lawsuit (Ongoing – Filed May 2024)
Plaintiff Avner Paulino filed a lawsuit in California federal court claiming Navy Federal allows AI company Verint to “secretly” listen to and analyze customer conversations without consent. The case alleges Verint’s Real-Time Agent Assist software transcribes conversations as they happen and captures tone, pitch, and pace to determine customers’ emotions.
The lawsuit claims Verint uses these conversations to enhance its own AI products and train models that it then sells to other companies.
Plaintiff’s Goal: Represent all California residents whose calls were monitored by companies using Verint’s technology without explicit consent.
Navy Federal Mortgage Discrimination Lawsuit: Where Does It Stand?
In February 2024, nine plaintiffs consolidated their claims into a class action alleging Navy Federal “systematically and intentionally discriminates against minority borrowers across the United States,” with the credit union denying loans for 52% of Black borrowers and 44% of Latino borrowers while denying only 23% of white applicants.
The lawsuit, led by attorneys Ben Crump and Adam Levitt, cited Navy Federal’s own data showing the credit union approved loans for a higher percentage of white borrowers earning less than $62,000 annually than for Black applicants earning $140,000 or more.
Court Rulings Narrow the Case
On May 30, 2024, Judge Leonie M. Brinkema dismissed the intentional discrimination claim and refused to let the case proceed as a class action, noting the varied circumstances of the nine plaintiffs. The court allowed plaintiffs to proceed individually on disparate impact claims under the Fair Housing Act and Equal Credit Opportunity Act, but not as a class action.
Navy Federal’s Defense: The credit union argues “alleged statistical disparities” are insufficient to prove discrimination and plaintiffs “fail to identify any Navy Federal policy or practice that caused any disparity”.
Congressional Response: Ten U.S. Senators led by Senate Banking Committee Chair Sherrod Brown urged the CFPB and HUD to investigate Navy Federal’s mortgage lending practices for compliance with fair housing and lending laws.
How Do I Know If I’m Affected by Navy Federal Lawsuits?
EFTA Settlement Eligibility Checklist:
✓ Had a Navy Federal account between October 10, 2022, and August 20, 2025 ✓ Reported unauthorized transactions or fraudulent withdrawals ✓ Navy Federal denied your fraud claim ✓ You requested documentation supporting the denial but didn’t receive it
ISA Fee Settlement (Claims Closed):
If you were charged ISA fees on U.S. domestic purchases between August 2016 and March 2023, the claim period has ended. However, check if you received payment—some members may have unclaimed funds.
Overdraft Fees (No Compensation Available):
Despite the November 2024 agreement, Navy Federal did not pay the $80 million in refunds after the CFPB dropped the case in July 2025. Members who incurred surprise overdraft fees between 2017 and 2022 will not receive compensation.
Mortgage Discrimination (No Class Action):
The case proceeds with individual plaintiffs only. Non-white mortgage applicants who believe they faced discrimination should consult attorneys separately, as the court refused class certification.
How Do I File a Claim for the Active EFTA Settlement?
Class members can file claims online or download and mail a PDF claim form to the settlement administrator at: Stephenson, et al. v. Navy Federal Credit Union, c/o Kroll Settlement Administration, PO Box 5324, New York, NY 10150-5324.
Required Information:
- Class member ID from your settlement notice
- Account details proving eligibility
- Documentation of denied fraud claims (if available)
Document Request Subclass: Members who requested documents from Navy Federal and didn’t receive them should check the appropriate box on the claim form.
What Compensation Can Members Expect?
EFTA Settlement Payments:
Individual payment amounts vary based on the number of valid claims submitted. The $1.7 million settlement fund covers cash payments, administrative costs, and attorneys’ fees, with each member’s share determined by the total number of approved claims.
ISA Fee Settlement (Distributed):
The maximum base payment was $4, with surplus funds distributed to members who incurred fees exceeding that amount, reduced pro rata if insufficient funds remained.
No Overdraft Compensation:
Despite initial promises of $80 million in refunds, members will receive nothing after the CFPB dropped the case.
What Happens Next in These Lawsuits?
EFTA Settlement Timeline:
- December 18, 2025: Claim deadline
- February 4, 2026: Final approval hearing
- ~30 days after approval: Payment distribution begins
Mortgage Discrimination Case:
The nine individual plaintiffs continue pursuing disparate impact claims. The court found Navy Federal’s loan approval statistics alone don’t prove intentional discrimination, requiring plaintiffs to show specific facts they were qualified for the mortgage products they sought.
AI Monitoring Lawsuit:
The California case proceeds in federal court, with Navy Federal also facing another class action in Virginia over mortgage discrimination.
Similar Financial Institution Settlements: What’s Precedent?
Navy Federal’s settlements align with broader industry patterns:
- Wells Fargo: Multiple settlements totaling over $2 billion for fake accounts and lending violations
- USAA: Agreed to pay $64.2 million in 2024 to settle claims over improperly charged fees and interest rates violating federal service member protections
- Capital One: $425 million data breach settlement
- Bank of America: $250 million for unauthorized account openings
For more information on similar class action settlements and financial institution lawsuits, check our comprehensive settlement database.
Navy Federal’s Official Response
Navy Federal stated: “As a member-owned, not-for-profit credit union, we are focused on putting our members first. That means we prioritize doing right by our members and ensuring they have the resources, tools and support they need to build strong financial futures”.
On the dropped overdraft case, Navy Federal defended its overdraft program, stating it “allows our members to make necessary, everyday purchases without going into long-term debt or turning to payday lenders” and that the credit union “complied with all applicable laws and regulations at the time and continues to do so”.
Regarding mortgage discrimination allegations, Navy Federal asserted: “As a not-for-profit credit union, Navy Federal is committed to serving each and every one of our members fairly, and we work daily to help expand economic opportunity and access to credit for our diverse community of members”.
FAQs About Navy Federal Class Action Lawsuits
Q: What is the Navy Federal class action lawsuit about?
Navy Federal faces multiple class actions: a $1.7 million EFTA settlement for denied fraud claims (active), a completed $5.5 million ISA fee settlement, a dropped $95 million CFPB overdraft case, ongoing AI monitoring litigation, and narrowed mortgage discrimination claims proceeding with individual plaintiffs only.
Q: Am I eligible for the Navy Federal settlement?
You’re eligible for the active EFTA settlement if Navy Federal denied your unauthorized transaction claims between October 10, 2022, and August 20, 2025. The ISA fee settlement claims period ended in August 2024.
Q: How much compensation will I receive from Navy Federal?
EFTA settlement amounts vary based on total valid claims submitted. The ISA fee settlement paid a maximum $4 base payment plus additional amounts for higher fees. The overdraft case refunds were canceled when the CFPB dropped the case in July 2025.
Q: What is the deadline to file a Navy Federal class action claim?
The EFTA settlement claim deadline is December 18, 2025. The ISA fee settlement deadline has passed.
Q: What happened to the Navy Federal overdraft lawsuit?
In July 2025, the CFPB dismissed the $95 million consent order requiring Navy Federal to refund $80 million to members and pay a $15 million penalty. Members will not receive the promised compensation.
Q: Is Navy Federal still facing mortgage discrimination lawsuits?
Yes, but the case no longer proceeds as a class action. The court dismissed intentional discrimination claims and refused class certification, allowing nine individual plaintiffs to pursue disparate impact claims only.
Q: How do I join the Navy Federal class action?
For the active EFTA settlement, file your claim online or mail the form to Kroll Settlement Administration by December 18, 2025. The mortgage discrimination case is not accepting new class members due to the court’s denial of class certification.
Key Takeaways for Navy Federal Members
Immediate Actions:
- File EFTA claims by December 18, 2025 if you had fraud claims denied
- Check for unclaimed ISA fee payments from the 2024 settlement
- Review account statements for unauthorized transactions or questionable fees
- Document all communications with Navy Federal regarding disputes
Understand Your Rights:
- Federal law requires credit unions to investigate unauthorized transaction claims promptly
- Members can request documentation supporting Navy Federal’s decisions
- Discrimination in mortgage lending violates the Fair Housing Act and Equal Credit Opportunity Act
Stay Informed:
- Monitor ongoing litigation developments
- Watch for new settlement notices
- Consider consulting consumer protection attorneys for individual concerns
For updates on banking class action lawsuits, consumer protection settlements, and financial institution litigation, bookmark our legal settlement database.
Legal Disclaimer: This information is for educational purposes only and does not constitute legal advice. The claims described are allegations made in legal filings and have not been proven in court except where settlements have been approved. Navy Federal Credit Union has denied wrongdoing in multiple cases. All parties are presumed innocent until proven otherwise. Consult with a qualified attorney for advice specific to your situation. Settlement eligibility and payment amounts are subject to court approval and may change.
About the Author
Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
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