The Consumer Financial Protection Bureau filed a criticism Friday against Comerica Bankand accuses the regional bank of failing to manage a federal advantages program that uses prepaid debit cards.
The lawsuit alleges that Comerica Bank “intentionally abandoned” greater than 24 million customer support calls, charged greater than 1,000,000 cardholders ATM fees they didn’t owe, and mishandled fraud complaints, all while denying federal advantages through prepaid -Debit card program Direct Express.
“By intentionally disconnecting millions of calls and charging illegal junk fees, Comerica increased its profits at the expense of Americans living on fixed incomes,” said CFPB Director Rohit Chopra.
The Direct Express program is a prepaid card that recipients of Social Security and other federal programs can use to pay for expenses similar to groceries and gas. Comerica has had a contract with the Treasury Department since 2008 to manage this system and supply customer support to the tens of millions of Americans who use the prepaid card, a lot of whom are disabled, elderly and unbanked.
While the Direct Express website The CFPB touts 24/7 customer support and claims that “when people had problems with their accounts, it was often impossible to speak to someone who could help.”
Comerica filed a previous criticism against the CFPB on Nov. 8, saying the bureau had exaggerated in its handling of the case and “failed to recognize that Comerica, as the financial agent of the Direct Express program, generally acted with the supervision and knowledge or consent of the federal government.” “,” it says within the lawsuit.
“Throughout the CFPB's investigation, we have worked together by sharing information and data to illustrate the uniqueness of this program and the fact that we operate under the authority of the Treasury,” said Louis Mora, vice chairman of media relations at Comerica. “Despite our good faith efforts to provide this critical context, the CFPB has consistently ignored our arguments and documentation.”
“We will continue to vigorously defend our reputation as a financial intermediary for the Direct Express program and remain committed to serving our cardholders,” Mora continued.
The CFPB has taken motion against banks for abuse of advantages prior to now, including in 2022 when the office imposed a nice Bank of America fined Bank of America $100 million in 2020 and 2021 for misusing federal unemployment advantages. The Office of the Comptroller of the Currency also fined the bank $125 million in a separate order.
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