VyStar Credit Union Responds to CFPB & NCUA Investigation
The Florida-based financial cooperative says it worked transparently with the independent federal agencies.
The $14.7 billion VyStar Credit Union said Thursday that over the past two years it has worked transparently with the CFPB and the NCUA while it was conducting an investigation of the credit union’s botched debacle when it rolled out a new online and mobile banking system in 2022.
The CFPB and NCUA investigation determined that VyStar violated the Consumer Financial Protection Act because the “credit union ignored red flags and continued with the rollout that caused members to lose access to their accounts and funds. The new, dysfunctional platform’s frequent outages and limited functionality led to financial losses and other harm to consumers.”
The CFPB noted that the new platform was taken offline soon after the launch, but when the credit union brought the system back online, the new platform lacked key banking services, some of which were not restored for months.
The Jacksonville, Fla.-based VyStar issued a prepared statement Thursday afternoon that it reached a mutual agreement with the CFPB related to the credit union’s online and mobile banking conversion challenges. That mutual agreement is a 47-page Consent Order that provides many details about what led up to and caused the failed rollout and what VyStar is required to implement to prevent similar technology challenges from happening again. The credit union also agreed to pay a $1.5 million civil fine and refund fees to members.
The credit union said when disruptions occurred during the conversion process, VyStar moved swiftly to mitigate any impact on its members and ensure that no member suffered financial harm as a result of the outage.
Additionally, VyStar said it proactively worked in good faith to address regulatory inquiries.
“VyStar reimbursed or waived all VyStar fees until services were restored; initiated a process for reimbursement of any third-party fees incurred as a result of the outage; and paused credit reporting during the course of the outage. To be clear, VyStar proactively and voluntarily undertook this response, without regulatory prompt,” the credit union said. “During the disruption, members maintained access to their funds and services through VyStar’s extensive network of ATMs and extended hours at both its contact centers and many of its numerous physical branches.”
Florida’s second largest credit union by assets said it has continued to make significant changes, including investments and upgrades to further enhance technical infrastructure, information security and digital services to members.
“These comprehensive improvements were independently identified and implemented and have resulted in exceptional service reliability and robust security protections in the online and mobile banking platforms,” VyStar said in its prepared statement. “Today, the VyStar app has more than 10,000 ratings with an average of 4.8 stars on the Apple App Store and over 14,000 ratings with an average of 4.5 stars on the Google Play Store, indicating high member satisfaction.”
VyStar also said it remains committed to prioritizing the best interests, well-being and financial security of its members, and that its intent is always to provide an enhanced banking experience for members by making improvements to its online and mobile banking platforms.
“We hope the continuous improvements to our online and mobile banking platforms reassures members that we are dedicated to being a responsive organization and emerging from this experience better and stronger,” VyStar President/CEO Brian Wolfburg said.