CFPB fines U.S. Bank $37.5M for opening sham accounts

On July 28, 2022, the Bureau issued a consent order against U.S. Bank National Association, a national bank headquartered in Minneapolis, Minnesota.

To increase sales of certain consumer financial products or services, U.S. Bank imposed sales goals on bank employees as part of their job description and implemented an incentive-compensation program that financially rewarded employees for selling those products and services.

The Bureau found that U.S. Bank issued credit cards and lines of credit and opened deposit accounts for certain consumers without their knowledge and consent and without required applications and disclosures in violation of the Truth in Lending Act, Truth in Savings Act, and their implementing regulations. The Bureau also found that the bank’s opening of accounts without consumers’ permission was abusive in violation of the Consumer Financial Protection Act of 2010. The Bureau further found that U.S. Bank violated the Fair Credit Reporting Act by using or obtaining consumer reports without a permissible purpose in connection with unauthorized applications for credit cards.

The bank’s conduct likely caused substantial injury in the form of fees; negative effects on consumer-credit profiles; the loss of control over personal identifying information; and the expenditure of consumer time and effort.

The order requires U.S. Bank to stop its unlawful practices and to develop a plan to remediate all harmed consumers by returning all unlawfully charged fees and costs, plus interest. The order also requires U.S. Bank to pay a $37.5 million penalty to the Bureau.