The Consumer Financial Protection Bureau is suing Walmart and financial technology companies for allegedly forcing drivers to use illegally high-value savings accounts to receive paychecks.
The agency alleges that Walmart and its vendor Branch Messenger coerced drivers who are part of Walmart’s Spark Driver gig work platform into using Branch Messenger savings accounts to receive compensation. They claim that if they don’t want to work, they will be fired. This service.
The CFPB also alleges that Walmart and Branch Messenger misled employees into believing they had same-day access to their earnings and that drivers had to follow a complicated process to access funds. I am doing it.
The CFPB claims that even if they were able to access the funds, drivers faced delays and fees if they needed to transfer the funds to an account of their choice, and as a result, workers would not be able to do so in 2021. Since 2017, it has paid more than $10 million in fees to remit its profits.
“Walmart made false promises, illegally opened accounts, and took advantage of more than 1 million delivery drivers,” CFPB Director Rohit Chopra said in a statement. “Companies cannot force workers to receive their wages through accounts that siphon off profits with junk fees.”
Walmart said in a statement that the CFPB’s lawsuit is full of “errors of fact” and “exaggerations and blatant misrepresentations of established legal principles.”
“The CFPB never gave Walmart a fair opportunity to present its case while conducting its hurried investigation,” the paper said. “We look forward to vigorously defending our company in a court that, unlike the CFPB, respects due process of law.”
Branch Messenger said in a statement that the CFPB’s lawsuit “misstates the law and facts” while omitting items intended to “conceal the agency’s obvious overreach.”
“Despite the company’s extensive cooperation with the investigation, the CFPB declined to engage with Branch in any meaningful way regarding this matter and instead rushed to file a lawsuit,” Branch said. “This approach shows that this case has nothing to do with the law or worker protections and everything to do with the media attention garnered by a lawsuit involving one of the world’s largest retailers. It is clear.”
The CFPB announced a flurry of rules and lawsuits this month as the Biden administration winds down and uncertainty clouds the agency’s future. Last week, the CFPB sued three major U.S. banks for failing to curb fraudulent activity on the digital payments platform Zelle. The bank and the company that operates Zelle, which is also named in the lawsuit, deny the charges.
It also sued Comerica Bank for harming consumers enrolled in the federal government’s Direct Express federal benefit delivery program. Comerica denies the charges and has filed a countersuit with the CFPB.
The agency also announced four separate rules, including one limiting bank overdraft fees, which were immediately challenged by the banking industry.
NBC News earlier reported that the agency is considering which rules to finalize before Republicans take control of all three branches of government. Republicans have signaled plans to disarm the CFPB, while President-elect Donald Trump has appointed the authors of Project 2025, which calls for the abolition of the CFPB, to influential positions.
Billionaire Trump donor Elon Musk, who will take on a high-level cost-cutting role, posted on his social platform X: “Delete the CFPB.”
