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WASHINGTON — The Consumer Financial Protection Bureau has sued Comerica Bank for failing people receiving federal benefits through the Direct Express program, the bureau said Friday.
The bureau accused Comerica Bank, a subsidiary of Comerica Inc., of deliberately disconnecting millions of customer service calls, charging illegal ATM fees to customers and mishandling fraud complaints.
"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 statement. "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."
The CFPB asked the United States District Court for the Northern District of Texas, where the bank is headquartered, to stop Comerica's allegedly abusive practices, provide refunds and pay fines.
"Direct Express cardholders — including but not limited to older Americans receiving Social Security benefits, disabled Americans receiving Social Security disability insurance payments, and coal workers eligible for federal benefits related to black lung disease — have the benefit loaded onto the prepaid cards issued by Comerica, which they can use to pay for
groceries, gas, and other expenses," the bureau said in its lawsuit. "Since April 1, 2019, however, Comerica has impaired cardholders' ability to protect and access their funds by routinely providing deficient customer service to Direct Express cardholders."
Comerica in a statement said that the bank "has worked hard to serve these important cardholders and to address any issues in this complex program."
"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," a Comerica spokesperson said. "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," Comerica said.
The lawsuit is the latest chapter in a longstanding saga between the CFPB and Comerica. American Banker first reported in 2023 that Comerica Bank officials privately acknowledged significant compliance shortcomings of the Treasury Department's Direct Express program and Comerica's role in it.