(Reuters) -Regional lender Comerica Bank faces allegations it systematically mistreated millions of mostly disabled and older customers and could pay penalties under new civil enforcement action, the U.S. watchdog agency for consumer finance announced on Friday.
The Consumer Financial Protection Bureau said it was suing Comerica for failing 3.4 million “Direct Express” card holders — who the agency said were primarily unbanked people receiving federal benefits — by deliberately disconnecting their phone calls and charging them illegal fees.
In doing so, “Comerica boosted its bottom line at the expense of Americans living on a fixed income,” Rohit Chopra, the agency’s director, said in a statement.
However, the Dallas-based lender said it had sued the CFPB in federal court last month, claiming the agency had overstepped its legal authority in the investigation after Comerica attempted to clarify matters.
“Despite our good faith efforts to provide this critical context, the CFPB has consistently ignored our arguments and documentation,” the bank said in a statement.
The Direct Express program has operated since 2008 under a U.S. Treasury contract with Comerica and provides prepaid debit cards to recipients of federal benefits, according to the CFPB.
According to the agency, Comerica vendors intentionally dropped more than 24 million calls from customers before they could be connected with bank representatives.
Comerica also allegedly imposed illegal terms of service on consumers seeking to stop payments and illegally failed to investigate account problems, CFPB said.
(Reporting By Susan Heavey and Douglas Gillison; Editing by Chizu Nomiyama and Bill Berkrot)
