US Bank fine overview:
- Who: The Consumer Financial Protection Bureau and Office of the Comptroller of the Currency announced a $36 million U.S. Bank fine.
- Why: U.S. Bank improperly prevented consumers from accessing their unemployment benefits during the COVID-19 pandemic.
- Where: The U.S. Bank fine will pay $5.7 million to certain U.S. consumers whose accounts were frozen.
U.S. Bank has reportedly agreed to pay nearly $36 million over allegations it froze tens of thousands of accounts and prevented consumers from accessing unemployment benefits during the COVID-19 pandemic, Law360 reports.
The Consumer Financial Protection Bureau and Office of the Comptroller of the Currency announced the US Bank fine on Dec. 19, in which the bank will pay a $15 million penalty and pay $5.7 million to consumers whose accounts were frozen. The OCC also issued a separate $15 million U.S. Bank fine.
U.S. Bank employment benefit investigation found bank improperly denied account access
The CFPB and OCC jointly investigated the U.S. Bank unemployment benefit freeze issue and found that the bank failed to allow customers to quickly regain access to their frozen accounts during the COVID-19 pandemic. U.S Bank also allegedly failed to provide provisional account credits while it looked into potentially unauthorized transfers.
U.S. Bank reportedly had contracts to deliver unemployment benefits to millions of consumers who were unemployed during the COVID-19 pandemic. The U.S. Bank unemployment benefit was provided through a ReliaCard prepaid card.
However, U.S. Bank allegedly froze those customers’ accounts for weeks at a time due to the anti-fraud measures it implemented. Due to these expanded measures, the CFPB alleged the bank did not have an adequate method for consumers to verify their identities to unfreeze their accounts.
Additionally, U.S. Bank failed to provide consumers with provisional account credits when they reported unauthorized transfers, the CFPB said. In many cases, the bank allegedly improperly required consumers to provide written information about the reported unauthorized transfers from their accounts.
“At a time when employment was close to 15%, many out-of-work Americans throughout the country had little choice but to rely on U.S. Bank for their unemployment benefits,” CFPB Director Rohit Chopra said in a statement.
“U.S. Bank blocked access to accounts and demanded burdensome paperwork in order for consumers to regain access to their frozen benefits.”
U.S. Bank says the issues stemmed from the massive 4,000% growth of the ReliaCard program during the COVID-19 pandemic. The bank says it “stepped up to enable the government to provide assistance to those in need during the pandemic” and that it prevented more than $375 million in fraud due to its enhanced anti-fraud efforts.
Earlier this year, U.S. Bank was sued by an investor in the wake of allegations the bank opened unauthorized accounts that resulted in a $37.5 million fine from the CFPB.
Did you experience a frozen U.S. Bank unemployment benefit during the COVID-19 pandemic? Tell us your story in the comments.
The CFPB US bank fine case is in the Matter of: U.S. Bank National Association, Case No. 2023-CFPB-0019, before the U.S. Consumer Financial Protection Bureau and the OCC U.S. Bank unemployment benefit case is In the Matter of: U.S. Bank National Association Cincinnati, Ohio, Case No. AA-ENF-2023-64, before the U.S. Department of the Treasury, Office of the Comptroller of the Currency.
Read About More Class Action Lawsuits & Class Action Settlements:
