CFPB Sues Comerica Bank Over Mishandling Federal Benefits Program

The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Comerica Bank, accusing the financial institution of mishandling its administration of the federal benefits program that uses prepaid debit cards.

The complaint, filed on Friday, alleges that Comerica intentionally terminated over 24 million customer service calls, charged more than 1 million cardholders unauthorized ATM fees, and mishandled fraud complaints while managing the Direct Express program.

Comerica Bank sign displayed on a building in Walnut Creek, California.

CFPB Director Rohit Chopra criticized Comerica for its actions, stating that the bank's actions harmed Americans living on fixed incomes. The Direct Express program, which Comerica has administered since 2008, provides prepaid cards to beneficiaries of Social Security and other federal programs. The cards help recipients, many of whom are elderly or disabled, manage expenses such as groceries and gas.

The CFPB claims Comerica failed to provide adequate customer service, despite advertising 24/7 assistance. Comerica, in response, has filed its own complaint against the CFPB, arguing that it acted with oversight from the federal government and that the bureau's actions were overreaching.

The case highlights the CFPB's continued efforts to address improper handling of federal benefits, following its previous action against Bank of America in 2022 for mishandling unemployment benefits.