By The Consumer Financial Protection Bureau on Friday charged Comerica Bank with abusing and neglecting vulnerable customers who receive federal benefits.
“The CFPB is suing Comerica Bank for illegally harming disabled and older Americans who count on Social Security and other federal benefits,” CFPB Director Rohit Chopra said in a release.
“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.”
For nearly two decades, the CFPB said in a civil complaint, the Texas-based bank has enjoyed an exclusive contract with the U.S. Department of Treasury to handle delivery of those benefits on prepaid debit cards, known as the Direct Express program.
Direct Express card users are primarily elderly and disabled Social Security beneficiaries who otherwise lack access to traditional forms of banking.
But since 2019, the CFPB says in the lawsuit, “Comerica has impaired cardholders’ ability to protect and access their funds by routinely providing deficient customer service to Direct Express cardholders.”
Among the alleged abuses, according to the CFPB’s lawsuit:
- Comerica and its vendors intentionally terminated almost 25 million customer-service calls while callers were on hold before they could speak to a representative about an issue with their Direct Express cards. As a result, Direct Express cardholders were not able to dispute charges and bookkeeping errors.
- Cardholders whose calls were not terminated were frequently subjected to excessive wait times to speak with a representative, sometimes up to several hours.
- Through its vendors, Comerica frequently told consumers who’d complained about fraudulent enrollment in Direct Express that “no error occurred,” even though the bank had already determined there was, in fact, enrollment fraud.
- Through the vendors, Comerica forced Direct Express cardholders to pay ATM fees to access their government benefits in situations where the cardholders were entitled to free withdrawals.
- Comerica refused to honor timely stop-payment requests, in certain cases requiring cardholders to instead request a new debit card. When cardholders sought to minimize their time without a card and access to funds, Comerica charged them fees to expedite delivery.
The agency called Direct Express customers “captive to Comerica” and said that, rather than ensure there was sufficient customer service to handle calls from Social Security and other benefits recipients, Comerica “cut corners to boost its bottom line.”
“When people had problems with their accounts, it was often impossible to talk to someone who would help,” the agency said.
In a statement, Comerica said it had sought to work with CFPB to resolve its concerns, but said the agency had “consistently ignored our arguments and documentation.”
As a result, it filed a lawsuit last month against the agency itself alleging regulatory overreach as it worked to investigate the case.
“Today, the CFPB doubled down by filing a countersuit against Comerica Bank,” a Comerica spokesperson said Friday. “We will continue to vigorously defend our record as the financial agent for the Direct Express program and remain committed to serving our cardholders.”
The U.S. Treasury Department, which manages the Direct Express program, did not respond to a request for comment.
The civil complaint comes as Republicans have signaled plans to defang the CFPB. President-elect Donald Trump has named authors of Project 2025 — which calls for eliminating the CFPB — to influential posts within his incoming administration. And on Wednesday, Elon Musk, who is slated for a high-level cost-cutting role, posted on his social platform X: “Delete CFPB.”
This has prompted warnings from consumer advocacy groups about the impact that a weakened CFPB, or its elimination, could have on everyday U.S. consumers.
“Gutting the CFPB is an open invitation to the worst actors in our economy to start screwing over working people again,” Jesse Van Tol, head of the National Community Reinvestment Coalition, which focuses on wealth-building in underserved communities, told NBC News in a recent interview. He called the agency “the most effective protector of working-class wallets in modern American history.”
The CFPB said it was seeking judicial relief “to address and remedy Comerica’s unlawful conduct, redress and damages for injured consumers,” and a civil-money penalty.
Earlier this week, a host of federal agencies – including the CFPB – led by the Federal Reserve issued a joint statement providing major banks with examples of how to effectively combat financial exploitation of elders. Although Comerica is a “supervised institution” addressed by the statement, the CFPB’s complaint against the bank does not make an explicit reference to elder exploitation, though it does note cases where enrollment fraud did occur and was not adequately addressed by the bank.
