CFPB fines U.S. Bank $35,700,000 for freezing tens of thousands of accounts during pandemic

The Consumer Financial Protection Bureau (CFPB) has fined U.S. Bank $35.7 million for its policy of suspending tens of thousands of prepaid debit card accounts at the height of the epidemic and making it difficult for customers to regain access.

The government claims that the bank stopped unemployed people from using their ReliaCard prepaid debit cards to get unemployment benefits since there wasn’t an easy method for accounts that were thought to have been faked to get their money back.

Billions of accounts were put on hold by the U.S. Bank. Unfortunately, it did not provide a dependable and speedy method for individuals to restore access.

In the midst of its investigation into possible fraudulent transactions, the bank did not even provide temporary account credits.

Along with a $15 million fine to the Consumer Financial Protection Bureau (CFPB) and a $15 million fine to the Office of the Comptroller of the Currency (OCC), the bank will pay $5.7 million to victims directly.

“There was a period when about 15% of the labor force was unemployed, and many people throughout the nation relied on the U.S. Bank to support them.

U.S. Bank suspended customers’ benefits and sought cumbersome documentation before allowing them to access their accounts again. As a result of the actions of the CFPB and the OCC, U.S. Bank is being held accountable for its failure to comply with the law.”

There has been no statement from the bank on the penalties in the news. The Minneapolis-based U.S. Bancorp owns 100% of U.S. Bank.

With about $668 billion in assets and 2,000 locations throughout 26 states, this bank ranks as the country’s fifth-largest commercial bank.

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