ALEXANDRIA, Va. (Oct. 31, 2024) – National Credit Union Administration Chairman Todd M. Harper and Board Member Tanya F. Otsuka released the following statements after the Consumer Financial Protection Bureau’s enforcement action today against VyStar Credit Union. The enforcement action follows a joint investigation by the NCUA and CFPB into VyStar’s violations of the Consumer Financial Protection Act. The Order is available on the CFPB’s website.
“Credit unions must prioritize their members, yet VyStar’s due diligence fell far short of what was required for completing a successful conversion of the credit union’s mobile and online banking platforms,” Chairman Harper said. “These management failures resulted in consumer harm over the course of not just weeks but months, as well as safety and soundness problems like strategic, reputational, legal, and compliance risks.”
“This is a victory for consumers harmed by VyStar’s irresponsible actions,” Board Member Otsuka said. “Credit unions should be held to the highest standard of member protection, as their core mission is to serve those of modest means. I am proud of the work done by the NCUA to hold VyStar accountable.”
The management and governance failures by VyStar and its assumption of excessive risk resulted in a banking platform outage and sustained period of limited functionality, which caused substantial injury to consumers. Credit union members incurred late fees and had difficulty accessing their funds during the transition to the new platform.
The CFPB ordered VyStar to refund all credit union members for previously uncompensated fees and costs that were caused by the system outage, rectify its processes for updating its systems, and pay a $1.5 million civil penalty to the CFPB’s victims relief fund.
VyStar, formerly known as JAX Navy Federal Credit Union, is a state-chartered credit union headquartered in Jacksonville, Florida, with 70 branches in Florida and 10 branches in Georgia. As of June 30, 2024, VyStar had approximately $14.75 billion in total assets and 984,565 members.