CFPB Slaps U.S. Bank With $37.5M Fine Over Unauthorized Accounts

The Consumer Financial Protection Bureau (CFPB) hit U.S. Bank with a $37.5 million consent order for illegally accessing customers’ credit reports and personal information to open accounts without their permission.

U.S. Bank attached sales goals to employees’ job requirements and offered them incentives for selling multiple products to customers, including checking and savings accounts, credit cards and lines of credit, according to a CFPB press release on Thursday (July 28).

In addition to the fine, the bank headquartered in Minneapolis, Minnesota also must “make harmed customers whole.” U.S. Bank operates over 2,800 locations nationwide and has more than $559 billion in assets, making it the fifth largest financial institution (FI) in the country.

The CFPB 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 Savings Act.

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“For over a decade, U.S. Bank knew its employees were taking advantage of its customers by misappropriating consumer data to create fictitious accounts,” CFPB Director Rohit Chopra said in the release.

“We all must do more to hold lawbreaking companies accountable when they abuse and misuse our sensitive personal data,” Chopra added.

The CFPB’s investigation into the matter kicked up “specific evidence” that U.S. Bank knew employees were buckling from sales pressure and opening accounts without the knowledge of some customers. Further, the bank didn’t have any procedures in place that could have prevented unauthorized accounts from being opened or detected.

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“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,” per the release.

“Customers also had to waste time and energy closing unauthorized accounts and resolving consequences stemming from them, including seeking refunds for improperly charged fees.”