VyStar Credit Union fined $1.5M for botched systems conversion

The CFPB yesterday announced action against VyStar Credit Union for harming consumers through its botched rollout of a new online banking system. In May 2022, VyStar transitioned to a new, dysfunctional online banking platform that made it difficult for credit union members to perform basic banking functions for weeks, with some features unavailable for more than six months. Families incurred fees and costs as a result of these problems. The CFPB is ordering VyStar to ensure that all consumers are made whole. VyStar must also 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 Florida state-chartered credit union headquartered in Jacksonville with 70 branches in Florida and 10 branches in Georgia. VyStar is one of the largest credit unions in the country, with approximately $14.75 billion in total assets and over 980,000 members. 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. The new system crashed upon launch because VyStar brought it online prematurely and failed to establish or follow critical processes to ensure its success. The platform was taken offline soon after launch. Upon bringing the system back online, the new platform lacked key banking services, some of which were not restored for months.

For further details, see “VyStar CU pays $1.5M for botched systems upgrades” in BankersOnline’s Penalties pages.

• NCUA Chairman Harper and Board Member Otsuka Statements on CFPB's VyStar Credit Union action