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American Focus > Blog > Economy > CFPB sues Comerica Bank over federal benefits program
Economy

CFPB sues Comerica Bank over federal benefits program

Last updated: December 7, 2024 7:51 am
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CFPB sues Comerica Bank over federal benefits program
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CFPB Sues Comerica Bank for Mishandling Federal Benefits Program

Comerica Bank sign on a building in Walnut Creek, California

The Consumer Financial Protection Bureau filed a complaint on Friday against Comerica Bank, alleging that the regional bank failed to properly administer a federal benefits program utilizing prepaid debit cards.

The lawsuit asserts that Comerica Bank deliberately terminated over 24 million customer service calls, wrongly charged more than 1 million cardholders ATM fees, and mishandled fraud complaints while managing federal benefits through the Direct Express prepaid debit card program.

CFPB Director Rohit Chopra stated, “By intentionally disconnecting millions of calls and imposing unauthorized fees, Comerica prioritized its profits over the well-being of individuals relying on fixed incomes.”

The Direct Express program offers a prepaid card for Social Security beneficiaries and other federal program recipients to cover expenses like groceries and gas. Comerica has been responsible for administering the program since 2008, providing customer service for millions of Americans using the prepaid card, many of whom are disabled or elderly and do not have traditional bank accounts.

Despite the Direct Express website advertising 24/7 customer service, the CFPB alleges that individuals faced difficulties resolving account issues due to lack of assistance.

In response, Comerica filed a complaint against the CFPB, arguing that the bureau had exceeded its authority and failed to acknowledge the oversight and approval of the federal government in its actions as the Financial Agent of the Direct Express program.

Comerica’s Vice President of Media Relations, Louis Mora, emphasized the bank’s cooperation with the CFPB but expressed frustration over the bureau’s alleged disregard for the unique nature of the program and the oversight provided by the Fiscal Service.

See also  Exclusive | Burberry Bandit’s grandma rips serial bank robber with 34 priors: ‘I’m gonna ring his neck’

The CFPB has a history of holding banks accountable for mishandling benefits, as seen in the case of Bank of America being fined $100 million in 2022 for mismanaging state unemployment benefits during the pandemic. The Office of the Comptroller of the Currency also imposed a $125 million fine on the bank in a separate order.

— NBC News’ Steve Kopack contributed to this report

TAGGED:BankBenefitsCFPBComericaFederalprogramsues
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