The Consumer Financial Protection Bureau on Friday accused Comerica Bank of abusing and neglecting vulnerable customers who receive federal benefits.
“The CFPB is suing Comerica Bank for unlawfully harming disabled and elderly Americans who rely on Social Security and other federal benefits,” CFPB Director Rohit Chopra said in a release. mentioned in.
“By intentionally disconnecting millions of calls and charging illegal junk fees, Comerica boosted its profits at the expense of Americans living on fixed incomes.”
The CFPB said in its civil complaint that for nearly two decades, the Texas-based bank had an exclusive contract with the U.S. Treasury to handle the delivery of benefits on prepaid debit cards, known as the Direct Express Program. He said it was tied.
Users of Direct Express cards are primarily elderly and disabled Social Security recipients who are unable to access traditional forms of banking services.
However, the CFPB says in the lawsuit that since 2019, “Comerica has consistently provided direct express cardholders with inadequate customer service to protect their cardholders’ funds.” , and has undermined their ability to access it.”
According to the CFPB complaint, some of the alleged abuses include:
Comerica and its vendors intentionally ended approximately 25 million customer service calls on hold before the caller could speak to a representative about their Direct Express card issue. As a result, Direct Express cardholders were unable to dispute charges or bookkeeping errors. Cardholders whose calls were not terminated often had to wait long periods of time, sometimes even hours, before speaking to a representative. Comerica frequently communicated to consumers through its vendors: Someone had complained about a fraudulent Direct Express registration, saying “no error occurred” even though the bank had already determined that there had actually been registration fraud. Comerica, through its vendors, forced Direct Express cardholders to pay ATM fees for access. Comerica will respond to timely payment stop requests, including denying government benefits in situations where the cardholder is entitled to free withdrawals and, in some cases, requiring the cardholder to receive a new debit card instead. refused to comply. In an effort to minimize the amount of time cardholders had access to their funds without their cards, Comerica charged a fee to speed up shipping.
The agency said Direct Express customers are “captives of Comerica,” and that instead of ensuring adequate customer service to handle calls from Social Security and other benefit recipients, Comerica ” “We’re cutting corners to increase profits,” he said.
“When people had problems with their accounts, they often did not have access to anyone who could help,” the agency said.
Comerica said in a statement that it has sought to work with the CFPB to resolve concerns, but that the CFPB “consistently ignored our arguments and documentation.”
As a result, the company filed a lawsuit against the agency itself last month, alleging regulatory overreach in its efforts to investigate the incident.
“Today, the CFPB stepped up its game by filing a counterclaim against Comerica Bank,” a Comerica spokesperson said Friday. “We will continue to vigorously protect our track record as a financial agent for the Direct Express program and remain committed to serving our cardholders.”
The U.S. Treasury Department, which administers the Direct Express program, did not respond to a request for comment.
The civil suit comes as Republicans signal plans to end attacks on the CFPB. President-elect Donald Trump has nominated the authors of Project 2025, which calls for the abolition of the CFPB, to influential positions within his incoming administration. And on Wednesday, Elon Musk, who will take on a high-level cost-cutting role, posted on his social platform X: “Delete the CFPB.”
As a result, consumer advocacy groups are warning of the impact that weakening or repealing the CFPB would have on average American consumers.
“Dismantling the CFPB is an open invitation for the worst actors in our economy to once again begin to bully working people.” Jesse Van Tol, president of the Community Reinvestment Coalition, told NBC News. Recent interviews. He called the institution “the most effective protector of working-class wallets in modern American history.”
The CFPB said it is seeking judicial relief and civil penalties to “address and redress Comerica’s wrongful conduct and provide relief and restitution to harmed consumers.”
Earlier this week, a number of federal agencies, including the Federal Reserve-led CFPB, issued a joint statement providing big banks with examples of how to effectively combat the economic exploitation of seniors. Although Comerica is the “supervisory agency” mentioned in the statement, the CFPB’s complaint against the bank does not explicitly mention elder exploitation, but registration fraud does occur and the bank does not respond appropriately. Cases where this was not the case are mentioned.
Contributed by Steve Kopack.
