Why Did the CFPB Fine US Bank $37.5 Million?

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On July 28, 2022, the Consumer Financial Protection Bureau (CFPB) took legal action against Minneapolis-based US Bank for, essentially, pressuring and incentivizing its employees to sell multiple products and services to its customers, including imposing sales goals as parts of their employees’ job requirements. U.S. Bank’s actions led to substantial harm to its unsuspecting customers. For more information on why the CFPB took this step and why it might matter to you, please read on, then contact an experienced California consumer lawyer soon.

What did U.S. Bank do to warrant a $37.5 million fine from the CFPB?

For over a decade, employees of U.S. Bank have been illegally accessing its customers’ credit reports and opening checking and savings accounts, credit cards and lines of credit without customers’ permission. The CFPB’s investigation uncovered that not only did U.S. Bank have knowledge of these activities, but pressured and incentivized its employees to do so, despite its obvious harm to its customers in the form of:

  • Unwanted accounts
  • Negative effects on their credit profiles
  • The loss of control over personally identifiable information
  • Wasted time and energy spent closing unauthorized accounts and resolving consequences stemming from them, including seeking refunds for improperly charged fees

Did U.S. Bank violate the law by incentivizing employees to open unauthorized accounts?

Yes, the CFPB’s investigation found that U.S. Bank violated the Consumer Financial Protection Act, the Fair Credit Reporting Act, the Truth in Lending Act and the Truth in Saving Act. Specifically, U.S. Bank had:

  • Exploited personal data without authorization: Under the Fair Credit Reporting Act, users of credit reports may only request them if they have a permissible purpose, which U.S. Bank lacked when it facilitated the opening of unauthorized credit cards and lines of credit.
  • Opened accounts without consumer permission: In violation of the Consumer Financial Protection Act, U.S. Bank opened deposit accounts, credit cards and lines of credit, some of which carried high-interest rates and expensive fees, without customers’ permission.
  • Failed to provide legally required consumer disclosures: The Truth in Savings Act requires banks to provide certain disclosure when opening new deposit accounts, which U.S. Bank failed to do.

What effect does this action have on customers of U.S. Bank?

Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating financial protection laws. In this instance, the CFPB ordered U.S. Bank to:

  • Pay a $37.5 million fine for deposit in the victims relief fund, and
  • Forfeit and return all unlawfully charged fees and costs to harmed customers

If a U.S. Bank employer has illegally accessed your information and you suffered harm as a result, you need to hold them accountable. For help obtaining your rightful compensation, speak with one of our skilled Los Angeles, California attorneys today.

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