On October 31, 2024, the CFPB took action against VyStar Credit Union for harming consumers through its botched rollout of a new online banking system. In May 2022, VyStar launched a new online banking platform that was dysfunctional, making it difficult for members to perform basic banking tasks for weeks, with some features unavailable for over six months.
VyStar, formerly known as JAX Navy Federal Credit Union, is a Florida state-chartered credit union headquartered in Jacksonville. In May 2022, VyStar attempted to launch a new virtual banking platform. VyStar anticipated banking services would be inaccessible for several days during the transition to the new platform, but it turned out to be much longer. In addition, the new system crashed upon launch and was taken offline soon after the launch. Upon bringing the system back online, the new platform lacked key banking services, some of which were not restored for months. This resulted in families incurring fees and costs.
The CFPB and the NCUA worked to contain the fallout from VyStar’s misconduct. The CFPB found that VyStar violated the Consumer Financial Protection Act, specifically through:
Depriving consumers access to money and accounts. VyStar overlooked warning signs and proceeded with a troubled rollout that restricted consumers’ access to their accounts and funds, resulting in financial losses and other harm due to frequent outages and limited functionality.
Rushing a new platform online without appropriate testing. VyStar rushed to complete the platform conversion despite warnings from its development team, leading to a virtual banking outage and ongoing functionality issues due to management failures.
The CFPB’s order requires VyStar to:
Refund fees to affected consumers, including interest costs imposed on members as a result of the outage;
Clean up its broken process for updating its systems; and
Pay a $1.5 million civil penalty to the CFPB’s victims relief fund.
Read the CFPB’s press release here.
The Consent Order can be found here.