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U.S. Bank Fined $37.5 Million for Illegally Opening New Accounts for Customers

By: April Carson

The Consumer Financial Protection Bureau fined Citibank, the fifth-largest commercial bank in the United States, for illegally obtaining consumers' credit reports and creating accounts without permission.

U.S. Bank, a Minnesota-based financial services corporation with over $559 billion in assets, incentivized its workers to sell bank products as part of their employment requirements and provided them rewards for doing so, according to the agency. The inquiry discovered that bank employees illegally accessed consumers' credit reports and personal data to open accounts without consent in order to achieve those targets. Those workers were then given bonuses and other monetary rewards.

The CFPB's investigation is ongoing, and the agency says it will take "appropriate action" once it is complete. U.S. Bank has not yet commented on the allegations.

The CFBP announced that it fined U.S. Bank $37.5 million following a five-year investigation Thursday, saying the bank "knew its employees were abusing their authority to improperly create accounts and steal money from consumers."

According to CFPB Director Rohit Chopra, the bank knew its workers were misusing their power to illegally establish phony accounts and steal money from customers for over a decade.

"This is outrageous conduct by a large bank," Chopra said in a press release. "It's disappointing that our action today is the first public enforcement action against this institution, but it won't be the last."

The CFPB says it will also order U.S. Bank to refund an estimated $6 million to affected customers and take steps to improve its employee training and supervision. The agency says it will also require the bank to hire an independent consultant to review its account-opening practices.

According to a representative from U.S. Bank, the bank has "made process and oversight improvements" since 2016 regarding sales practice concerns. Employees are now eligible for incentives only where the customer utilizes the service.

"We are disappointed with the CFPB's decision," said Dan Diaz, a spokesman for U.S. Bancorp. "We take our responsibilities to our customers very seriously and make every effort to service them in a fair, professional and transparent manner."

The payout is "related to legacy sales tactics utilized in a tiny number of accounts dating back to 2010." According to a statement from U.S. Bank, the settlement is "connected to legacy sales practices utilizing a minor percentage of accounts that date back to 2010." We are pleased to put this issue behind us.

U.S. Bank, based in Minnesota, has over 2,800 branches across the United States.

The CFBP said it discovered evidence that the bank was aware of its employees opening accounts without customers' consent, and that it did not have in place to prevent or detect them. Employees were rewarded for pushing bank products, according on the report.

The investigators discovered that the workers opened deposit accounts, credit cards, and lines of credit with unfavorable rates and fees that were later charged to the client.

The report said that in some cases, the employees transferred money from an existing account to the new one without authorization, which then caused fees.

"At no point did we find any evidence that customers were unaware that these products had been opened in their name," said CFPB director Richard Cordray.

"U.S. Bank employees opened deposit and credit card accounts without consumers' knowledge or consent," Cordray said. "The bank also failed to take basic steps to ensure its employees were not opening fake accounts."

The CFBP said that U.S. Bank's actions harmed consumers in the form of undesired accounts, economic harm to their credit ratings, and loss of control over their personal information.

The CFPB is ordering U.S. Bank to stop the illegal practices, refund all fees related to the unauthorized accounts, and pay a $5 million penalty.

U.S. Bank said in a statement that it takes "full responsibility" for the actions of its employees.

"We are deeply sorry for any instances where customers were put through undue inconvenience and expense," said Andy Cecere, president and CEO of U.S. Bancorp.

Customers were compelled to close the unauthorized accounts in their names and seek repayments themselves due to the unwanted accounts, negative impacts on their credit profiles, and lack of control over personally identifiable data.

"This is a very serious matter. We will be taking all necessary steps to make sure that something like this never happens again."

"We are committed to doing what is right for our customers, and we apologize for any inconvenience or frustration this may have caused," Cecere said.

For more details, visit the original story published on

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About the Blogger:

April Carson is the daughter of Billy Carson. She received her bachelor's degree in Social Sciences from Jacksonville University, where she was also on the Women's Basketball team. She now has a successful clothing company that specializes in organic baby clothes and other items. Take a look at their most popular fall fashions on

To read more of April's blogs, check out her website! She publishes new blogs on a daily basis, including the most helpful mommy advice and baby care tips! Follow on IG @bossbabymav



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