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CFPB Orders U.S. Bank to Pay $21 Million for Illegal Conduct During COVID-19 Pandemic

The bank’s actions caused tens of thousands of American workers to lose access to unemployment benefits

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today ordered U.S. Bank to pay nearly $21 million for keeping out-of-work consumers from accessing unemployment benefits at the height of the COVID-19 pandemic. U.S. Bank froze tens of thousands of accounts. However, it failed to provide people a reliable and quick way to regain access. The bank also failed to provide provisional account credits, while investigating potentially unauthorized transfers. Today’s order requires U.S. Bank to pay $5.7 million to consumers harmed by its actions and to pay a $15 million penalty.

The Office of the Comptroller of the Currency (OCC) separately fined U.S. Bank $15 million. The CFPB and OCC coordinated during their investigations into U.S. Bank’s illegal conduct.

“At a time when unemployment was close to 15%, many out-of-work Americans throughout the country had little choice but to rely on U.S. Bank for their unemployment benefits. U.S. Bank blocked access to accounts and demanded burdensome paperwork in order for consumers to regain access to their frozen benefits," said CFPB Director Rohit Chopra. “U.S. Bank must comply with the law, and the CFPB and OCC are making the bank pay for its conduct.”

U.S. Bank is a wholly-owned subsidiary of U.S. Bancorp (NYSE: USB). It is based in Minneapolis. The bank is the fifth-largest commercial bank in the country, with 2,000 branches in 26 states. As of September 30, 2023, U.S. Bank had $668 billion in assets.

At the onset of the COVID-19 pandemic in 2020, U.S. Bank had contracts with at least 19 states and the District of Columbia to deliver unemployment benefits. Millions of newly out-of-work consumers relied on the unemployment benefits delivered through U.S. Bank’s ReliaCard prepaid card. However, tens of thousands of those consumers found their accounts frozen for weeks or more at a time. Consumers had to verify their identities to unfreeze their accounts, but the bank lacked an adequate way for them to do so. Many of other consumers found U.S. Bank failed to provide them provisional account credits after they reported unauthorized transfers from their accounts.

The CFPB found that U.S. Bank violated the Consumer Financial Protection Act and the Electronic Fund Transfer Act. Specifically, the bank harmed consumers by withholding:

  • Access to state benefits: Expanded anti-fraud controls, implemented by U.S. Bank, resulted in tens of thousands of frozen accounts. However, U.S. Bank did not provide consistent, accurate instructions to consumers on how to unfreeze their accounts quickly. That left consumers unable to access unemployment funds.
  • Provisional account credits: When accountholders report unauthorized transfers, banks must provide provisional account credits if their investigations take more than 10 days. In thousands of cases, U.S. Bank failed to provide provisional credits. The bank failed to provide the credits because it improperly required additional written confirmation about the suspected unauthorized transfers from consumers. These actions left consumers unable to spend the funds they had reported as unauthorized transfers.

Enforcement Action

Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating consumer financial protection laws, including engaging in unfair, deceptive, or abusive acts or practices. It also has the authority to take action against institutions for violating the Electronic Fund Transfer Act. The CFPB’s order requires U.S. Bank to:

  • Pay $5.7 million to consumers: U.S. Bank is required to provide redress to the tens of thousands of consumers harmed by the bank’s administration failures.
  • Provide consumers access to their unemployment funds: The order set guardrails on how U.S. Bank can limit consumer access to unemployment benefit account funds. The bank must have adequate processes to help consumers regain access.
  • Issue provisional account credits: Consumers who submit a notice of error online will not have to submit additional, written confirmation about an unauthorized electronic transfer to receive provisional account credits.
  • Pay a $15 million fine: U.S. Bank will pay a $15 million penalty to the CFPB’s victims relief fund.

Read the CFPB’s order.

Read the CFPB’s 2022 action against U.S. Bank. In its previous action against the bank, the CFPB fined U.S. Bank $37.5 million for illegally accessing its customers’ credit reports and opening checking and savings accounts, credit cards, and lines of credit without customers’ permission.

Read the CFPB’s 2022 action against Bank of America.The CFPB and OCC together fined Bank of America $225 million for botching the disbursement of state unemployment benefits at the height of the COVID-19 pandemic.

Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees who believe their companies have violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov. To learn more about reporting potential industry misconduct, visit the CFPB’s website.


The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit www.consumerfinance.gov.