US Bank fined nearly $21M for withholding benefits during pandemic
U.S. Bank will pay almost $21 million after officials found the company kept unemployed consumers from accessing their benefits during the worst of the COVID-19 pandemic.
On Tuesday, the Consumer Financial Protection Bureau (CFPB) ordered U.S. Bank to pay $5.7 million to consumers to provide relief to those harmed by the bank and $15 million in fines to the CFPB victims relief fund. The Office of the Comptroller of the Currency (OCC) separately fined U.S. Bank $15 million.
“At a time when unemployment 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. U.S. Bank blocked access to accounts and demanded burdensome paperwork in order for consumers to regain access to their frozen benefits,” said CFPB Director Rohit Chopra. “U.S. Bank must comply with the law, and the CFPB and OCC are making the bank pay for its conduct.”
The CFPB previously fined U.S. Bank $37.5 million for illegally accessing customers’ credit reports and opening accounts without their permission.
The bank must also provide consumers with access to their unemployment funds, which U.S. Bank cannot restrict limit anymore, according to the consent order.
U.S. Bank sent the following statement to 5 EYEWITNESS NEWS on Wednesday:
“The global pandemic posed new challenges for businesses across the economy, including U.S. Bank’s program to distribute state unemployment benefits using ReliaCard prepaid debit cards which grew nearly 4000% during this period. In the face of these unprecedented times, the Bank stepped up to enable the government to provide assistance to those in need during the pandemic and worked to identify and combat fraud. While a small portion of cardholders were affected due to extended holds, we prevented fraud of over $375 million and returned to the states hundreds of millions in additional funds sent to questionable accounts. This saved taxpayers from significant losses during challenging times. The Bank is proud of the enhancements it has made to the ReliaCard program since the inception of the pandemic. We remain committed to serving our state agency clients and their customers.”
Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling 855-411-2372.