US Bank to Pay $37.5 Million to Settle Sham Account Allegations -- Update
July 28 2022 - 12:02PM
Dow Jones News
By Dean Seal
U.S. Bank NA will pay a $37.5 million fine to settle the
Consumer Financial Protection Bureau's allegations that it
illegally accessed customers' credit reports to open unauthorized
bank accounts and credit cards.
The regulator said in an enforcement action Thursday that the
bank used sales goals and incentives to pressure employees into
selling multiple products and services to customers, ultimately
pushing those employees to illegally access customers' sensitive
personal data and then open accounts without their permission.
U.S. Bank neither admits nor denies the allegations, and has
agreed to resolve the matter with a $37.5 million penalty.
A spokesperson for U.S. Bank said Thursday that the settlement
relates to sales practices that date back to 2010 and involved a
small percentage of accounts. The bank has been working since 2016
to address concerns about those practices, the spokesperson
said.
"The action by the CFPB closes out a 5+ year investigation,"
according to the statement. "We are pleased to put this matter
behind us."
The CFPB claims the misconduct went on for more than a decade,
and that U.S. Bank was aware that its sales goals and
incentive-compensation program were spurring employees to open
unauthorized accounts but did not have the controls in place to
prevent the misconduct.
Shares of U.S. Bancorp, the bank's parent company, fell 3.1% to
$46.70 in early trading Thursday.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
July 28, 2022 11:47 ET (15:47 GMT)
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