CFPB Takes Comerica Bank to Court for Neglecting Disabled and Older Americans

Comerica Bank purportedly wronged disabled and older customers in an alleged scheme to boost profits. Now, the regional lender is facing a lawsuit from the Consumer Financial Protection Bureau (CFPB).

The CFPB alleges Comerica charged illicit ATM fees to over 1 million Direct Express cardholders. In addition, the agency believes the bank purposely disconnected 24 million phone calls from customers who were trying to reach a representative.

“By deliberately disconnecting millions of calls and harvesting illegal junk fees, Comerica boosted its bottom line at the expense of Americans living on a fixed income,” CFPB Director Rohit Chopra said in a statement.

The CFPB is also accusing the bank of mishandling fraud claims. Consumers who feared they were fraudulently enrolled in the Direct Express program were told by Comerica that “no error occurred.” However, the bank allegedly did find fraud involved.

Potentially fraudulent or incorrect charges on a customer’s account must be investigated under federal law. However, the CFPB claims Comerica failed to do so in more than 20,000 cases. For the times the bank did look into the matter, it apparently did not adequately or clearly resolve the claim.

Comerica’s Complaint Against the CFPB

Comerica contracted with the U.S. Treasury Department in 2008 to administer and manage the customer service for the Direct Express program. Essentially, the program provides a prepaid debit card for approximately 3.4 million disabled Americans, Social Security recipients, and other government beneficiaries, many of whom do not have a traditional bank account. The card is used to pay essential expenses like groceries and gas. Cardholders in the Direct Express program have no choice but to use Comerica for services.

The bank filed a complaint against the CFPB in November, stating that the agency overstepped its authority. The lender claims it acted within the federal government’s oversight and guidelines.

“Throughout the CFPB’s investigation, we have cooperated by sharing information and data to illustrate the unique nature of this program and the fact that we operate with the oversight of the Fiscal Service,” said Comerica’s vice president of media relations, Louis Mora, per CNBC. “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 record as the financial agent for the Direct Express program and remain committed to serving our cardholders,” Mora added.

The CFPB has been busy this year enhancing consumer rights and making sure lending institutions are doing the right thing. In May, the agency tightened rules on buy now, pay later services, which came after numerous consumer complaints.