WASHINGTON–In a case that echoes an earlier scandal at Wells Fargo, the CFPB said it has taken action against Minneapolis-based U.S. Bank for illegally accessing its customers’ credit reports and opening checking and savings accounts, credit cards, and lines of credit without customers’ permission.
The Bureau has hit the bank with a $37.5 million fine.
“U.S. Bank pressured and incentivized its employees to sell multiple products and services to its customers, including imposing sales goals as part of their employees’ job requirements,” the CFPB said. “In response, U.S. Bank employees unlawfully accessed customers’ credit reports and sensitive personal data to apply for and open unauthorized accounts.”
Lasted Longer than a Decade
“For over a decade, U.S. Bank knew its employees were taking advantage of its customers by misappropriating consumer data to create fictitious accounts,” said CFPB Director Rohit Chopra. “We all must do more to hold lawbreaking companies accountable when they abuse and misuse our sensitive personal data.”
The $559-billion U.S. Bank is the fifth largest bank in the U.S., with more than 2,800 banking branches nationally.
The CFPB said its investigation found specific evidence that revealed that U.S. Bank was aware that sales pressure was leading employees to open accounts without authorization, and the bank had inadequate procedures to prevent and detect these accounts.
Customers ‘Harmed’
“Specifically, U.S. Bank imposed sales goals on bank employees as part of their job requirements. U.S. Bank also implemented sales campaigns and an incentive-compensation program that financially rewarded employees for selling bank products,” the CFPB said. “U.S. Bank’s conduct harmed its customers in the form of unwanted accounts, negative effects on their credit profiles, and the loss of control over personally identifiable information. Customers also had to waste time and energy closing unauthorized accounts and resolving consequences stemming from them, including seeking refunds for improperly charged fees.”
The CFPB said it found U.S. Bank violated the Consumer Financial Protection Act, the Fair Credit Reporting Act, the Truth in Lending Act, and the Truth in Savings Act.
Enforcement Action
The CFPB said U.S. Bank will:
- Pay a $37.5 million fine to be deposited into the CFPB’s victims relief fund, which provides compensation to consumers harmed by violations of federal consumer financial protection law.
- Forfeit and return all unlawfully charged fees and costs to harmed customers: U.S. Bank must develop a plan to remediate harmed consumers by returning all unlawfully charged fees and costs, plus interest.