TheConsumer Financial Protection Bureau issued a consent order and a $5.5 millionpenalty to Vienna, Va.-based NavyFederal Credit Union over the credit union's debt collectionactivities.
The creditunion agreed to the issuance of the five-year order Oct. 7, without admitting ordenying any wrongdoing.
The creditunion was also ordered to set aside $23 million for paying redress to certaincustomers, and to come up with a compliance plan with regard to its debtcollection practices.
Accordingto the agency, the credit union made numerous deceptive representations tocustomers in connection with its debt collection activities and it unfairlyrestricted certain customers' electronic access to their accounts.
Inaddition, the CFPB deemed Navy FCU's compliance controls and employee trainingon debt collection communications inadequate. The agency took issue with thecredit union's representations on the effects of loan delinquency. It alsoaccused the credit union of making largely empty threats to sue or notify amember's commanding officer when a borrower fell behind on a loan.
In anemailed statement, the credit union said: "Where our collections practiceshave come up short in the Consumer Financial Protection Bureau's estimation, wehave made all the necessary changes. We have cooperated with the CFPBthroughout the process. … We remain steadfastly focused on upholding ourstandards of service excellence and the trust of our membership."