Comerica Bank was accused by the Consumer Financial Protection Bureau on Friday of mistreating and ignoring its federally disadvantaged clients.
In a statement, CFPB Director Rohit Chopras stated that the agency is suing Comerica Bank for unlawfully hurting elderly and disabled Americans who rely on Social Security and other federal benefits.
Comerica increased its profits at the expense of Americans on fixed incomes by willfully disconnecting millions of calls and collecting unlawful garbage fees.
The Texas-based bank has had an exclusive contract with the U.S. Department of Treasury to manage the distribution of those benefits on prepaid debit cards, known as the Direct Express program, for almost 20 years, the CFPB claimed in a civil lawsuit.
The majority of Direct Express cardholders are Social Security recipients who are elderly or disabled and do not have access to standard banking services.
However, the CFPB claims in the lawsuit that since 2019, Comerica has often given Direct Express cardholders subpar customer assistance, impairing their ability to safeguard and access their money.
The CFPB’s lawsuit lists the following as some of the alleged abuses:
- 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.
According to the government, Comerica took shortcuts to increase its profits rather than making sure there was enough customer support to handle calls from Social Security and other benefit claimants. Direct Express customers were also transferred to Comerica.
According to the agency, it was frequently hard to speak with someone who could assist when consumers were experiencing issues with their accounts.
In a statement, Comerica claimed that although it had attempted to cooperate with the CFPB to address its concerns, the organization had continuously disregarded our documents and reasoning.
In an effort to look into the matter, it filed a complaint against the agency last month, claiming regulatory overreach.
According to a Comerica representative on Friday, the CFPB doubled down today by bringing a countersuit against Comerica Bank. We remain dedicated to serving our cardholders and will continue to aggressively defend our record as the Direct Express program’s financial agent.
A request for comment from the U.S. Treasury Department, which oversees the Direct Express program, was not answered.
Republicans have announced plans to defang the CFPB, which coincides with the filing of the civil case. Authors of Project 2025, which advocates dismantling the CFPB, have been appointed to high-level positions in President-elect Donald Trump’s incoming government. Additionally, Elon Musk, who is expected to hold a high-level cost-cutting position, commented on his social media platform X: Delete CFPB on Wednesday.
Consumer advocacy organizations then issued warnings about the effects on regular American consumers of a weakened CFPB, or one that may eventually cease to exist altogether.
The chairman of the National Community Reinvestment Coalition, which works on creating wealth in underserved communities, Jesse Van Tol, told NBC News in a recent interview that gutting the CFPB is an open invitation to the worst actors in our economy to start taking advantage of working people once more. He referred to the organization as the most successful working-class pocketbook guardian in contemporary American history.
The CFPB announced that it was pursuing a civil-money penalty, redress and damages for harmed customers, and court relief to address and repair Comerica’s illegal behavior.
A joint statement earlier this week from the government Reserve and a number of government agencies, including the CFPB, gave big banks examples of how to effectively prevent elder financial exploitation. The CFPB’s complaint against the bank does not specifically include elder abuse, despite the fact that Comerica is a supervised institution covered by the statement. However, it does highlight instances in which enrollment fraud did occur and the bank failed to appropriately address it.
Note: Every piece of content is rigorously reviewed by our team of experienced writers and editors to ensure its accuracy. Our writers use credible sources and adhere to strict fact-checking protocols to verify all claims and data before publication. If an error is identified, we promptly correct it and strive for transparency in all updates, feel free to reach out to us via email. We appreciate your trust and support!