WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Comerica Bank, accusing it of systematically failing its 3.4 million Direct Express cardholders, most of whom are unbanked Americans relying on federal benefits. The lawsuit alleges that Comerica deliberately disconnected 24 million customer service calls, charged over a million customers illegal ATM fees, mishandled fraud complaints, and imposed unlawful terms on account holders. These actions allegedly allowed Comerica to prioritize profits over its legal obligations to protect vulnerable consumers.
Comerica administers the Direct Express prepaid debit card program under a contract with the U.S. Department of the Treasury. The program serves millions of Social Security recipients, disabled individuals, and other federal benefit recipients, many of whom are financially underserved. Direct Express enables cardholders to access their benefits for essential expenses such as groceries and utilities.
Allegations of Consumer Harm
The CFPB’s investigation highlighted a range of violations affecting millions of customers. Chief among the allegations were failures in customer service, with Comerica’s vendors intentionally disconnecting more than 24 million calls before they could be addressed. Cardholders who reached representatives reportedly faced hours-long wait times to resolve issues such as unauthorized transactions and lost or stolen cards.
The lawsuit also alleges that Comerica charged illegal ATM withdrawal fees to over one million cardholders, despite federal protections mandating free access to government funds in certain circumstances. Additionally, the CFPB found that Comerica mishandled fraud claims, failed to investigate disputed transactions, and imposed requirements on customers to stop payments that violated federal law.
Broader Implications and Enforcement
Comerica’s alleged actions, including forcing many cardholders to close their accounts and incur additional fees, have furthered concerns about financial exploitation of economically vulnerable individuals. CFPB Director Rohit Chopra stated, “The CFPB is suing Comerica Bank for illegally harming disabled and older Americans who count on Social Security and other federal benefits.”
Under the Consumer Financial Protection Act, the CFPB seeks to halt Comerica’s practices, secure refunds for affected customers, and impose civil penalties. Any penalties collected would be deposited into the CFPB’s victims relief fund, which provides financial assistance to consumers harmed by unlawful practices.
This case aims to enforce consumer protection laws and ensure accountability in industries serving at-risk populations. If the court rules against Comerica, the decision could set a significant precedent regarding corporate responsibility in handling government benefit programs.
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