Too big for your britches

I am sure that I am not the only one that has noticed that it has been a pretty eventful last few months when it comes to enforcement actions. My inbox has been filled with a variety of blog posts and news alerts that recap the most recent dropping of the proverbial enforcement hammer. Most of the time it is one of the “big dogs”, so I don’t really think anything of it and move on to the next topic. But last week I was a little shocked when one of those news alerts had the words “Credit Union” in the subject line. By now I am sure most of you are aware of the recent happenings with Navy Federal Credit Union so I won’t bore you with a recap, but it did make me wonder how this could have happened.

Now I understand that Navy Federal has about $77 billion in assets which makes it a more robust institution than most, but that doesn’t mean it can’t happen to you “little guys” too. Just take a look at the recent settlement between the DOJ and Charter Bank of Corpus Christi over UDAPP violations in regard to auto lending pricing. We are talking about a much smaller financial institution with about $277 million in assets that fell into the shadow of the previously mentioned hammer. The DOJ found that this unfair practice went on for five years from 2009 to 2014. That is when the FDIC first noticed the practice and had referred the case to the DOJ. That means five years went by with no one questioning this practice or even noticing the impact it was having.

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