A Comerica Bank signal on a constructing in Walnut Creek, California, March 30, 2023.
Smith Collection/gado | Archive Photos | Getty Images
The Consumer Financial Protection Bureau filed a grievance Friday in opposition to Comerica Bank, accusing the regional financial institution of failing to manage a federal advantages program that makes use of pay as you go debit playing cards.
The lawsuit claims Comerica Bank “deliberately terminated” greater than 24 million customer support calls, charged greater than 1 million cardholders ATM charges they did not owe and mishandled fraud complaints whereas offering federal advantages via the Direct Express pay as you go debit card program.
“By intentionally disconnecting tens of millions of calls and harvesting unlawful junk charges, Comerica boosted its backside line on the expense of Americans dwelling on a set revenue,” CFPB Director Rohit Chopra stated.
The Direct Express program is a pay as you go card that beneficiaries of Social Security and different federal applications can use to pay for bills together with groceries and fuel. Comerica has been contracted with the Department of the Treasury since 2008 to manage this system and deal with customer support for the tens of millions of Americans utilizing the pay as you go card, lots of whom are disabled and older and haven’t got a financial institution.
While the Direct Express web site advertises 24/7 customer support, the CFPB alleges that “when folks had issues with their accounts, it was usually unattainable to speak to somebody who would assist.”
Comerica filed an earlier grievance in opposition to the CFPB on Nov. 8, arguing the bureau had overreached in its dealing with of the case and “has didn’t acknowledge that, as Financial Agent of the Direct Express program, Comerica typically acted with the oversight and data or approval of the federal authorities,” the go well with reads.
“Throughout the CFPB’s investigation, now we have cooperated by sharing data and information as an example the distinctive nature of this program and the truth that we function with the oversight of the Fiscal Service,” stated Louis Mora, Comerica vp of media relations. “Despite our good religion efforts to offer this crucial context, the CFPB has persistently ignored our arguments and documentation.”
“We will proceed to vigorously defend our report because the monetary agent for the Direct Express program and stay dedicated to serving our cardholders,” Mora continued.
The CFPB has taken motion in opposition to banks for mishandling advantages prior to now, together with in 2022 when the bureau fined Bank of America $100 million for mishandling state unemployment advantages in 2020 and 2021. The Office of the Comptroller of the Currency additionally fined the financial institution $125 million in a separate order.
— NBC News’ Steve Kopack contributed to this report
