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A word of Caution! CFPB Takes Action Against VyStar for 'Botched' Online Banking System Rollout

The CFPB ordered Jacksonville, Fla.-based VyStar Credit Union ($14.7 billion in assets, 997,469 members) to pay a $1.5 million civil penalty for its failed online banking system rollout in 2022.

On May 13, 2022, VyStar attempted to switch to a new online and mobile banking platform. The brief outage, as explained to members, was planned to last for two days. The outage lasted for more than a week, and systems were still not fully functional a month later. At the time, members were furious and posted tens of thousands of complaints on the credit union's Facebook page.

Thursday's action by the CFPB called VyStar's rollout "botched" and "dysfunctional."

"VyStar and its senior management bungled the credit union's rollout of a new banking system and left customers stranded without online access to their accounts," said CFPB Director Rohit Chopra. "VyStar's careless errors inflicted financial harm on their credit union members."

The CFPB's order requires VyStar to:

  • Refund fees to affected consumers: VyStar must ensure that the fees charged to its members as a result of the outage have been refunded, and reimburse any outstanding third-party fees or costs, including interest costs, imposed on members as a result of the outage.
  • Clean up its broken process for updating its systems: For future updates to its banking systems, VyStar must create contingency plans to minimize the impact on consumers' ability to use its banking platform. The plans must include sufficient customer service resources to address consumer problems, and ensure upgrades and maintenance for consumer-facing banking systems are performed in a timely manner.
  • Pay a $1.5 million fine: VyStar will pay a $1.5 million civil penalty to the CFPB's victims relief fund.

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