Comerica Bank is being sued by the CFPB for failing to manage a federal benefits program.

Comerica Bank is being sued by the CFPB for failing to manage a federal benefits program.
Comerica Bank is being sued by the CFPB for failing to manage a federal benefits program.
  • Comerica Bank was accused by the Consumer Financial Protection Bureau of not properly managing a federal benefits program that utilizes prepaid debit cards.
  • More than 24 million customer service calls were intentionally terminated by Comerica Bank, over 1 million cardholders were charged ATM fees they didn't owe, and fraud complaints were mishandled by the bank, according to the lawsuit.
  • Beneficiaries, many of whom are older and disabled, can utilize the Direct Express program, a prepaid card, to cover expenses such as groceries and gas.

The regional bank was accused by the Consumer Financial Protection Bureau on Friday of failing to manage a federal benefits program that utilizes prepaid debit cards.

Comerica Bank is being sued for intentionally ending over 24 million customer service calls, charging more than 1 million cardholders for ATM fees they didn't owe, and mishandling fraud complaints while providing federal benefits through the Direct Express prepaid debit card program.

Rohit Chopra, CFPB Director, stated that Comerica increased its profits by intentionally cutting off millions of calls and collecting unlawful fees, at the expense of Americans on a fixed income.

Since 2008, Comerica has been responsible for managing the Direct Express program, which is a prepaid card used by Social Security and other federal program beneficiaries to cover expenses such as groceries and gas. This program is particularly beneficial for disabled and older individuals who do not have access to a bank.

The CFPB claims that despite Direct Express's 24/7 customer service advertising, it was difficult for customers to get assistance when they encountered issues with their accounts.

In 2022, the CFPB fined Bank of America $100 million for mishandling state unemployment benefits in 2020 and 2021, while the Office of the Comptroller of the Currency also fined the bank $125 million in a separate order.

Representatives from Comerica Bank did not immediately respond to a request for comment.

by Kristian Burt

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