A Comerica Bank sign on a building in Walnut Creek, California, March 30, 2023.
Smith Collection/gado | Archive photos | Getty Images
The Consumer Financial Protection Bureau filed a complaint By Friday Comericabankaccusing the regional bank of failing to administer a federal benefits program that uses prepaid debit cards.
The lawsuit alleges that Comerica Bank “intentionally terminated more than 24 million customer service calls,” charged more than 1 million cardholders ATM fees they did not owe and mishandled fraud complaints while providing federal benefits through the Direct Express prepaid debit card program.
“By deliberately cutting millions of calls and racking up illegal junk fees, Comerica has increased its bottom line at the expense of Americans living on a fixed income,” said CFPB Director Rohit Chopra.
The Direct Express program is a prepaid card that beneficiaries of Social Security and other federal programs can use to pay for expenses, including groceries and gas. Comerica has had a contract with the Treasury Department since 2008 to administer the program and provide customer service for the millions of Americans who use the prepaid card, many of whom are disabled, elderly and unbanked.
While the Direct Express website advertises 24/7 customer service, the CFPB claims that “when people had problems with their accounts, it was often impossible to talk to someone who would help.”
Comerica has previously filed a complaint against the CFPB on November 8, arguing that the agency went too far in handling the case and “failed to recognize that Comerica, as financial agent of the Direct Express program, generally acted with supervision, connivance, or approval of the federal government,” the suit reads.
“Throughout the CFPB’s investigation, we have worked together by sharing information and data to illustrate the unique nature of this program and the fact that we operate under the supervision of the Internal Revenue Service,” said Louis Mora, Comerica’s vice president of media relations. “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 action against banks in the past, including in 2022, for mishandling benefits when the agency imposed a fine Bank of America $100 million for mishandling state unemployment benefits in 2020 and 2021. The Office of the Comptroller of the Coin also fined the bank $125 million in a separate order.
— Steve Kopack of NBC News contributed to this report