Please ensure Javascript is enabled for purposes of website accessibility
Upcoming Event

Best Places to Work in Virginia

Hamburger Menu Hamburger Menu

Tag: Navy Federal Credit Union

Navy Federal ordered to refund customers $80M, pay $15M civil penalty

The Consumer Financial Protection Bureau is ordering Navy Federal Credit Union to refund more than $80 million to customers and pay a $15 million civil penalty for allegedly charging illegal overdraft fees.

CFPB announced the actions against the nation’s largest credit union on Thursday. CFPB alleges that from 2017 to 2022, Vienna-based Navy Federal charged customers surprise overdraft fees on certain ATM withdrawals and debit card purchases, despite their accounts showing sufficient funds at the transaction times.

The $15 million civil penalty will go to CFPB’s victims relief fund, called the Civil Penalty Fund. According to a CFPB news release, the penalty is the largest that CFPB has levied against a credit union for illegal overdraft fees.

“Navy Federal fully cooperated with the CFPB’s investigation and we will continue to comply with all applicable laws and regulations, just as we always have and as we believe we did here,” The credit union said in a statement. “Nevertheless, this settlement enables us to focus on serving our members and their families. As a member-owned, not-for-profit credit union, we are focused on putting our members first.”

Additionally, the credit union stated, “over the past several years, Navy Federal has continued to comply with evolving expectations — including by automatically refunding certain overdraft fees since January 2023.” It will also eliminate “nonsufficient fund fees” for personal checking accounts in the first quarter of 2025, a reform it announced in October.

As of Sept. 30, Navy Federal had $180 billion in assets. The credit union has 360 branches, more than 14 million members and about 24,000 employees.

“Navy Federal illegally harvested tens of millions of dollars in junk fees, including from active-duty service members and veterans,” CFPB Director Rohit Chopra said in a statement. “The CFPB’s work to rid the market of illegal junk fees has saved American families billions of dollars.”

The CFPB said in a news release it found that Navy Federal violated the Consumer Financial Protection Act through charging surprise overdraft fees on purchases made with sufficient funds in consumers’ accounts at the transaction times and by charging overdraft fees resulting from delayed peer-to-peer payments that had undisclosed processing times.

Through its Optional Overdraft Protection Service, Navy Federal charged consumers $20 for most overdraft transactions and collected nearly $1 billion in overdraft fees from 2017 to 2021, according to the CFPB.

According to the CFPB, Navy Federal charged customers overdraft fees if a customer’s account had a negative balance once a transaction posted, although the account had had enough money to cover the transaction when the consumer made it. The credit union collected an average of $44 million annually in these fees, the CFPB alleges.

Navy Federal, the CFPB alleges, also charged overdraft fees when customers tried to use funds from payment services like Zelle, PayPal and Cash App that showed in Navy Federal systems as immediately available to spend but were still processing. The credit union did not disclose that payments received after 10 a.m. Eastern time initially, and later after 8 p.m. EST, wouldn’t post until the next business day. Navy Federal collected at least $4 million from these fines, according to the CFPB.

“We will continue to support and invest in our members — including the military, veterans and their families — to help them meet their financial goals,” Navy Federal said in a statement.

Navy Federal Credit Union CEO McDuffie to retire

Mary McDuffie, president and CEO of Vienna-based Navy Federal Credit Union, the nation’s largest credit union with $168.4 billion in assets and more than 13 million members, is retiring as of the end of February, and Chief Operating Officer Dietrich Kuhlmann will succeed her starting March 1, the credit union announced Wednesday.

According to the announcement, McDuffie, who became the credit union’s CEO in 2018, announced her retirement in September 2023, but Navy Federal did not send out a public announcement at the time. McDuffie has been with the credit union for 24 years.

Kuhlmann, meanwhile, was named COO in 2022, after joining the financial institution in 2019 as head of branch operations and then serving as chief real estate lending officer. He was also a member of the credit union’s board of directors from 2010 to 2012 and is a retired Navy rear admiral.

“I’ve had the pleasure of working closely with Dietrich in numerous capacities since he came on board at Navy Federal,” McDuffie said in a statement. “A leader of integrity with a powerful sense of duty and purpose, Dietrich also genuinely understands what our members need. I can think of no better individual to steer us into the next phase of growth and further our mission to serve Navy Federal Credit Union’s members and their families.”

Dietrich Kuhlmann
Dietrich Kuhlmann

Kuhlmann is a U.S. Naval Academy graduate, and he holds a master’s degree in engineering management from Catholic University of America. Before joining the credit union, he served 35 years in the Navy and the U.S. Department of Defense. He was a career submariner with a sub-specialty in financial management, working as programming division director on staff of the Chief of Naval Operations and overseeing the Navy’s $800 billion, five-year capital allocation process, according to Navy Federal’s announcement Wednesday.

“I’m tremendously grateful to be trusted with the responsibility to lead Navy Federal Credit Union,” Kuhlmann said in a statement. “This is an incredible opportunity to continue my career of service to our military community, and I’m eager to build upon the progress Mary has championed on behalf of our members as CEO.”

As Navy Federal’s first woman CEO, McDuffie led more than 22,000 employees. A Wellesley College alumna, she was senior vice president of marketing for electronic payments company Star Systems and started her career with ad agency J. Walter Thompson and serves on the Federal Reserve Bank of Richmond’s Baltimore board. Her board term ends this year, according to the Richmond Fed.

Finance | Insurance 2023: MARY McDUFFIE

This year marks the 90th birthday of Navy Federal, the world’s largest credit union. As a leader focused on helping others thrive, McDuffie sees this milestone as an occasion to celebrate the credit union’s dedication to its members, writing on LinkedIn, “I’m thankful every day to be part of an organization that puts its people and its members first.”

Navy Federal serves armed forces, veterans, civilian and contractor personnel, as well as their families. The credit union’s more than 22,000 employees serve more than 12.6 million members and manage upward of $166 billion in assets.

McDuffie, a Wellesley College alum, has been at Navy Federal since 1999, becoming CEO in 2019. Prior to joining the credit union, she was senior vice president of marketing for electronic payments company Star Systems and started her career with ad agency J. Walter Thompson. She serves on the Federal Reserve Bank of Richmond’s Baltimore board.

Fortune recently placed Navy Federal on its 100 Best Companies to Work For list for the 12th year in a row. And in 2022, Forrester named the credit union as the best multichannel bank for customer experience for the seventh year in a row.

Navy Federal names new chief operating officer

Vienna-based Navy Federal Credit Union has named a retired rear admiral to serve as chief operating officer.

Dietrich Kuhlmann took over from former COO Debbie Calder, who has retired, effective Monday. He will oversee the credit union’s operations and its 20,000 workers in service of its members. Kuhlmann joined Navy Federal in 2019 as head of branch operations and most recently served as its chief real estate lending officer. Before joining Navy Federal full time, Kuhlmann volunteered on the credit union’s board of directors from 2010 to 2012, serving on its membership and supervisory committees, according to a news release.

“Dietrich has a deep understanding of the financial needs of the military, veterans and their families,” said Navy Federal President and CEO Mary McDuffie. “He has demonstrated in his time at Navy Federal and throughout his remarkable career in the Navy that he is focused on the mission at-hand, serving our members and employees.”

Kuhlmann graduated from the United States Naval Academy in 1983 and spent nearly three decades in the sea service as a submariner, though he also has a specialty in financial management. In addition to service on board five submarines, Kuhlmann commanded the USS Michigan twice. After his promotion to admiral, Kuhlmann commanded Submarine Group Nine, overseeing all submarine matters in the Pacific Northwest, from 2012 to 2014.

Kuhlmann’s naval service also included financial assignments at the Pentagon, including a role as programming division director for the chief of naval operations. In that role, he was responsible for an $800 billion, 5-year capital allocation process that included devising options to address readiness, personnel and force development challenges.

“At Navy Federal, we have truly made our members’ financial needs and well-being our mission,” said Kuhlmann. “From my time in the Navy to now at Navy Federal, I’m incredibly honored to continue a career in service of the entire military community.”

Navy Federal is the world’s largest credit union, serving more than 11 million members across the globe.

Navy Federal hires new CFO

Vienna-based Navy Federal Credit Union has hired John Collins, a 20-year veteran of Capital One Financial Corp, as its new chief financial officer.

“John brings with him a wealth of experience that will serve Navy Federal well,” said Navy Federal President and CEO Mary McDuffie. “I know with his proven track record, John will hit the ground running in our mission of providing award-winning service.”

Collins holds a bachelor’s degree in accounting from the University of Richmond. He previously served as an executive in capital markets and risk analytics at McLean-based Capital One, where he also led two of Capital One’s bank acquisitions and integrations. Among his roles, he has served as controller for an acquired bank and as CFO for a line of business and chief of staff to a CFO.

“I’m honored to join Navy Federal and its rich tradition of serving those who have served and the communities that support them,” said Collins. “It’s clear that everyone in the organization – from our teams in contact center, digital teams and beyond – that there is a heavy emphasis on prioritizing our members’ needs and making their financial mission our own. I look forward to working with and learning from the team, and using my broad experience managing different facets of an organization’s finances to help continue making these goals a reality.”

The world’s largest credit union, Navy Federal has more than 9 million members worldwide. With a global network of 341 branches, it has more than 21,500 employees.

Navy Federal ranked No. 4 U.S. brand for customer experience

Big Four accounting firm KPMG announced Monday it has named the Vienna-based Navy Federal Credit Union No. 4 on its annual list of top 10 U.S. brands for customer experience excellence.

The KPMG U.S. Customer Experience Excellence report identifies top-performing brands and industries in terms of customer experience based on a survey of approximately 11,000 U.S. consumers. In light of COVID-19, KPMG reported that brands that used technology, including artificial intelligence, to move the customer experience online performed better in the survey. 

USAA, H-E-B and Chick-fil-A remained in the top three spots on the list this year, with Navy Federal Credit Union placing fourth. In-N-Out Burger, Publix, Wegmans and Charles Schwab were new to the list. The 2020 top 10 U.S. brands, as reported by KPMG are:

  1. USAA, San Antonio, Texas
  2. H-E-B, San Antonio, Texas
  3. Chick-fil-A, Atlanta
  4. Navy Federal Credit Union, Vienna
  5. Edward Jones, St. Louis
  6. In-N-Out Burger, Irvine, California
  7. Costco Wholesale, Issaquah, Washington
  8. Publix, Lakeland, Florida
  9. Wegmans, Rochester, New York
  10. Charles Schwab, San Francisco

“Leaders in our 2020 index are purpose-led companies with deep connective customer relationships, offering online experiences that are immersive, emotionally connective and safe,” Julio Hernandez, KPMG LLP U.S. customer advisory practice lead, said in a statement “With the move to online accelerating due to COVID-19, the nature of the relationship between brands and their customers has changed, bringing the need for commercial cadence to the forefront. 

“Our analysis also shows a move to the age of ‘buying into’ from ‘buying from,’ as customers are seeking companies that make a difference environmentally and socially.”

Established in 1933, Navy Federal is the world’s largest credit union, with more than 9 million members around the globe. The credit union across its 330 branches employs more than 18,000 people, holds $112.09 billion in assets and serves nearly 9 million members. Last year, the Navy Federal added more than 1 million members and opened 20 branches.

President and CEO Mary McDuffie in late 2019 pledged to add another 20 branches this year and work to improve the customer experience. Navy Federal is also in the midst of a $100 million expansion of its Frederick call center, expected to create more than 1,400 jobs. In January, Navy Federal made the top 500 companies on Forbes Magazine’s third annual America’s Best Employers for Diversity list. Only 19 Virginia companies were named to the list this year.

KPMG’s survey asked participants to evaluate integrity, resolution, expectations, time and effort, personalized experience and empathy. The top 10 U.S. brands outperformed the market for integrity and empathy, according to KPMG.

 

Subscribe to Virginia Business.

Get our daily e-newsletter.

 

Navy Federal Credit Union taps new CTO

Navy Federal Credit Union has hired Amtrak’s chief technology officer, Sovan Shatpathy, to serve as its new CTO, leading the credit union’s information services department.

“Our ISD teams are behind nearly all of the technology our members and employees use,” said Navy Federal’s chief information officer, Tony Gallardy, in a statement. “Sovan’s experience will lend a fresh perspective to the credit union and help us continue to build on the service we’re known for.”

Shatpathy will be responsible for Navy Federal’s technology strategy, architecture, enterprise data, integration and software engineering services. Prior to working for Amtrak, Shatpathy spent nearly a decade at Cisco.

“I feel very connected to Navy Federal’s mission,” said Shatpathy. “It’s fulfilling to know our work positively impacts service members, veterans and their families.”

Established in 1933, Navy Federal is the world’s largest credit union, with more than 9 million members around the globe.