CFPB fines US bank $37.5 million
The Consumer Financial Protection Bureau (CFPB) hit US Bank with $37.5 million consent order for illegally accessing credit reports and personal information of customers to open accounts without their permission.
US Bank attached sales targets to employees’ job requirements and offered them incentives to sell multiple products to customers, including checking and savings accounts, credit cards and lines of credit, according to a CFPB Press release Thursday (July 28).
In addition to the fine, the Minneapolis, Minnesota-headquartered bank must also “repair harmed customers.” US Bank operates more than 2,800 locations nationwide and has over $559 billion in assets, making it the nation’s fifth largest financial institution (FI).
The CFPB found that the US bank violated the Consumer Financial Protection Act, the Fair Credit Reporting Act, the Truth in Lending Act and the Truth in Savings Act.
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“For more than a decade, US Bank has known that its employees were taking advantage of its customers by misappropriating consumer data to create fictitious accounts,” CFPB Director Rohit Chopra said in the statement.
“We all need to do more to hold companies that break the law accountable when they misuse and misuse our sensitive personal data,” Chopra added.
The CFPB’s investigation into the case found “specific evidence” that the US Bank knew employees were giving in to sales pressure and opening accounts without the knowledge of some customers. In addition, the bank had no procedures in place that could have prevented the opening or detection of unauthorized accounts.
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“US Bank’s conduct has harmed its customers in the form of unwanted accounts, negative effects on their credit profiles, and loss of control over personally identifiable information,” the statement said.
“Clients have also had to waste time and energy closing unauthorized accounts and resolving the resulting consequences, including requesting reimbursement of incorrectly charged fees.”