U.S. Bancorp Fined $37.5 Million Over Sham-Account Allegations

U.S. Bancorp was fined $37.5 million by US regulators over allegations that its employees illegally accessed client information to open sham checking and savings accounts, credit cards and lines of credit without the customers’ permission.

The Minneapolis-based bank will be required to make affected customers whole by returning all unlawfully charged fees and costs, plus interest, in addition to paying the penalty to the Consumer Financial Protection Bureau, the agency said in a statement Thursday. The lender’s sales goals pressured employees to open the fake accounts, and U.S. Bancorp “had inadequate procedures to prevent and detect these accounts,” the CFPB said.

“For over a decade, U.S. Bank knew its employees were taking advantage of its customers by misappropriating consumer data to create fictitious accounts,” CFPB Director Rohit Chopra said in the statement. “We all must do more to hold lawbreaking companies accountable when they abuse and misuse our sensitive personal data.”

U.S. Bancorp’s settlement with the CFPB “related to legacy sales practices involving a small percentage of accounts dating back to 2010,” the company said in an emailed statement Thursday.

“Since 2016, the bank has made process and oversight improvements that have been effective in addressing these sales-practices concerns,” U.S. Bancorp said. “The action by the CFPB closes out a five-plus-year investigation. We are pleased to put this matter behind us.”

The accusations echo scandals that have dogged Wells Fargo & Co. in recent years, though that bank faced much steeper penalties by the CFPB and US Office of the Comptroller of the Currency tied to its wrongdoing. The San Francisco-based lender’s scandals erupted in 2016 with the revelation that employees opened millions of fake accounts to meet sales goals.

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Max Reyes in New York at mreyes125@bloomberg.net

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Daniel Taub

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