The Consumer Financial Protection Bureau (CFPB) has initiated legal action against Comerica Bank for breaches while offering federal benefits programme through Direct Express prepaid debit cards.

The bank, responsible for providing federal benefits to unbanked Americans, has been accused of deliberately disconnecting 24 million customer service calls and charging over one million cardholders illegal ATM fees, among other violations.

Comerica Bank, a subsidiary of Comerica, reported assets exceeding $84bn and deposits of over $71bn at the end of 2022.

The bank has been administering the Direct Express programme since 2008, offering a vital service for millions of Americans, including senior citizens and disabled individuals, to receive their federal benefits.

The CFPB’s investigation revealed that Comerica failed to maintain adequate customer service, leading to excessive wait times and disconnected calls.

Cardholders faced significant challenges when addressing account issues, unauthorised transactions, and lost or stolen cards.

The CFPB alleges that Comerica’s actions included illegal ATM fees, misleading fraud victims, imposing unlawful terms of service, and neglecting to investigate account problems correctly.

The agency’s enforcement action seeks to halt Comerica’s unlawful practices, secure refunds for affected customers, and impose civil penalties to be contributed to CFPB’s victim relief fund.

CFPB director Rohit Chopra said: “The CFPB is suing Comerica Bank for illegally harming disabled and older Americans who count on Social Security and other federal benefits.

“By deliberately disconnecting millions of calls and harvesting illegal junk fees, Comerica boosted its bottom line at the expense of Americans living on a fixed income.”