WASHINGTON (Reuters) -The top U.S. watchdog agency for consumer finance this week canceled a $95 million settlement reached last year with Navy Federal Credit Union, a lender officials in the prior administration had accused of illegally charging surprise overdraft fees, according to an order published Wednesday.

In a separate order also published Wednesday, the CFPB likewise canceled a November action against the nonbank mortgage company Fay Servicing over alleged violations of mortgage servicing laws. 

The decisions were the latest moves by the U.S. Consumer Financial Protection Bureau to undo cases already concluded by the agency, which President Donald Trump has sought to shrink drastically if not eliminate outright. The CFPB last month exited its corporate monitorship of Bank of America from a 2023 settlement and in May canceled a settlement with Toyota from the same year over allegations of pushing car buyers into unwanted product bundles.

 Representatives for both companies welcomed the news, saying they were committed to properly serving their customers.

"Navy Federal complied with all applicable laws and regulations at the time and continues to do so.  We firmly believe the CFPB's decision to terminate the order was appropriate," a spokesperson for the credit union said.

The CFPB did not immediately respond to requests for comment. 

Navy Federal primarily services military service members, veterans, civilian employees of the military and their families. In an internal memo in April, CFPB Chief Legal Officer Mark Paoletta said the agency would focus its reduced resources on "pressing threats to consumers, particularly service members and their families and veterans."

In November, the CFPB had ordered Navy Federal to pay $95 million, including $80 million in redress to consumers over allegations the credit union charged depositors whose accounts had sufficient funds at the time of a purchase but fell into the red by the time the charge later posted to their accounts. The CFPB also said depositors paid fees if they drew on funds received via services like PayPal and CashApp and the credit union's system incorrectly told them the funds were immediately available to spend. 

In an order signed Tuesday, CFPB acting Director Russell Vought said the November order was terminated, including provisions requiring redress payments to allegedly harmed consumers. However the similar order concerning Fay Servicing indicated the CFPB would distribute $3 million in redress payments specific to that case.

(Editing by Stephen Coates)