JACKSONVILLE, Fla. – Over two years after VyStar Credit Union launched an issue-plagued mobile and online banking experience for members, the Jacksonville-based bank now faces an over million-dollar fine.
What was supposed to be a three-day-long scheduled outage in May 2022 quickly evolved into a months-long disaster for the bank as the move to the new platform was filled with frustrating complications.
The calamitous rollout locked members out of their accounts, causing them not to be able to access their money. When they were able to log in, they found their balances were inaccurate, resulting in long lines full of concerned members at local branches.
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The Consumer Financial Protection Bureau (CFPB) ordered the credit union to pay a $1.5 million civil penalty to the CFPB‘s victims’ relief fund. The credit union was also required to refund any fees members may have accrued because of the outage.
The CFPB also said the credit union needed to form a contingency plan that includes “sufficient customer service resources” and ensures any scheduled maintenance for future banking system updates is “performed in a timely manner.”
A 47-page consent order filed by the CFPB said the brief service interruption was supposed to last from May 13 to May 15, but the platform had to be taken offline on May 17.
VyStar relaunched a limited version of the platform as a temporary remedy but members still could not access their account statements, make internal transfers between accounts, credit card and loan payment functions, the ability to set up recurring payments, or access full transaction histories.
VyStar released a statement to News4JAX on Thursday saying that it has worked on transparently with the CFPB and the National Credit Union Administration over the last two years.
The credit union said it reimbursed or waived all fees.
VyStar also said it paused credit reporting during the outage and voluntarily undertook the response without regulatory prompt.
“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 and CEO Brian Wolfburg said on Thursday.
Read the 47-page Consent Order document below:
Members called the ordeal irritating and frustrating because VyStar could not immediately produce answers as to when things would finally be straightened out.
VyStar’s chief member experience officer and CEO, who was on vacation as the issues unfolded, sincerely apologized for the mishap and took responsibility for the issues that impacted members.
The credit union assured members that their money was safe and the outage was not a result of a cyberattack.
Chief Member Experience Officer Joel Swanson explained to News4JAX on May 20, 2022, that Nymbus, a software company, was in charge of the online and mobile banking transformation and had crews working around the clock to restore full access to members.
The document said full functionality with the new banking platform, where members were able to access the same features from the old banking platform was not restored until December 2022.