U.S. Bancorp signals CFPB has actually shown up heat in pre-paid cards probe

U.S. Bancorp, which has actually been dealing with regulative examination in connection with pre-paid cards that were utilized to disperse welfare throughout the pandemic, stated Monday that it is complying with all pending assessments.

Daniel Acker/Bloomberg

The Consumer Financial Protection Bureau is weighing an enforcement action versus U.S. Bancorp after introducing an examination of its management of pre-paid cards for welfare, according to a securities filing by the business.

The Minneapolis business, which divulged the CFPB’s examination late in 2015, stated in a filing Monday that the firm is now “considering a potential enforcement action” which U.S. Bancorp is complying totally with all pending assessments. The CFPB probe centers on welfare paid out throughout the pandemic.

A representative for U.S. Bancorp, the moms and dad business of U.S. Bank, decreased to comment beyond the general public filing.

Banks that deal with state federal governments to administer joblessness insurance coverage programs have actually dealt with a series of issues because the start of the COVID-19 pandemic. Though information of the U.S. Bancorp probe are not openly offered, other banks have actually dealt with fraud-related issues due in part to broadened advantages throughout the pandemic.

Nearly 14% of funds in pandemic-related welfare in 4 states most likely went to scammers, according to a U.S. Department of Labor inspector general audit provided in 2015.  Several banks deal with mentions to release pre-paid cards to joblessness insurance coverage recipients, however raised scams has added to some banks reviewing those programs.

For example, Cleveland-based KeyCorp has actually stopped releasing pre-paid cards for Illinois’ joblessness insurance coverage program, a choice that resulted in a slide in its charge earnings at the start of in 2015.

Also in 2015, federal regulators fined Bank of America $225 million for mistakes in dispersing welfare and other federal government support in a lots states, and for wrongfully freezing customer accounts.

U.S. Bank’s ReliaCard provides access to joblessness insurance coverage advantages in states such as Pennsylvania, Kentucky, Nebraska, Ohio, Iowa and Kansas, according to a CFPB database.

The business’s securities filing on Monday likewise divulged a different query by the Securities and Exchange Commission into digital interactions at U.S. Bancorp’s broker-dealer and signed up financial investment consultant subsidiaries.

That probe mirrors the SEC’s examination of Wall Street banks whose workers utilized WhatsApp or other unapproved messaging platforms to interact. Those practices, which regulators state breached recordkeeping requirements for monetary companies, resulted in $1.8 billion of charges in 2015 versus eleven companies.

In its filing, U.S. Bancorp stated the SEC’s ask for info is “part of an industrywide inquiry,” which the firm inquired “concerning compliance with record-retention requirements relating to electronic business communications.”

Wells Fargo, which was not amongst the 11 banks that were fined in 2015, divulged comparable examinations by the SEC and Commodity Futures Trading Commission in a current securities filing.


A news media journalist always on the go, I've been published in major publications including VICE, The Atlantic, and TIME.

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