The bank says it has cooperated with the CFPB throughout its investigation.
Comerica filed a lawsuit against the CFPB on November 8, 2024. The lawsuit challenges the bureau’s regulatory overreach and its handling of this case. The CFPB doubled down by filing a countersuit against Comerica Bank.
The Treasury Department selected Bank of New York Mellon as the new agent for the program beginning January 3rd.
The CFPB Has Significant And Substantial Issues With Comerica Bank
The CFPB claims Comerica charged illegal ATM fees to more than 1 million cardholders over a 5 year period.
The complaint also states the bank’s vendors intentionally terminated 25 million customer-service calls from cardholders who were on hold.
Other cardholders, the CFPB said were frequently subjected to excessive wait times to speak with a representative.
The inadequate customer service created problems for Direct Express cardholders. Namely, cardholders who wanted to dispute unauthorized transfers and bookkeeping errors.
The CFPB is asking the court to order Comerica to halt these practices and provide refunds to affected customers. In addition, they want the bank to pay civil penalties that would go to the CFPB’s victim relief fund.
The U.S. Department of Treasury granted the Direct Express contract with Comerica has since 2008. The card enables people who don’t have bank accounts to receive monthly federal benefits through prepaid debit cards. Direct Express currently serves roughly 3.4 million people.
Many people receiving Social Security and other federal benefits use direct deposit into their bank accounts.
The Direct Express card helps people avoid costly check cashing fees. Customers can also use the card to buy groceries and pay bills. It also allows them to get cash at thousands of locations. The prepaid card is the only method for unbanked consumers to receive certain government benefits.
Is Comerica Bank Committing Bank Fraud?
In addition, the CFPB said Comerica led its consumers to agree to waive their consumer protections. They did this by requiring cardholders to contact and request merchants to stop pre-authorized payment transfers from their account.
And some consumers ran into headaches involving fraud.
The CFPB also states 20,000 consumers allege they had been fraudulently enrolled into the Direct Express program.
A bank is required under federal law to take steps to investigate such errors within a specified timeframe. However, Comerica ignored them.
Thousands of cardholders were forced by the bank’s vendors to close their accounts to stop a preauthorized payments. The CFPB said this led to more cash out of pocket for those on limited incomes.
As a result, seniors and disabled consumers receiving federal benefits had to pay more money in fees to speed up the receipt of a new debit card to regain access to their benefits.
Read More About Comerica Bank And Other Banking Scandals On MFI-Miami.com.
The CFPB accuses Comerica Bank of bad customer service and charging illegal ATM fees who use the Direct Express card. Seniors and the disabled use the Direct Express card for federal benefits.
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