Federal regulatory body terminates legal action against Comerica bank
The Consumer Financial Protection Bureau (CFPB) has dropped its lawsuit against Comerica Bank, a move that was part of a broader strategy by the Trump administration to roll back enforcement cases initiated during the Biden administration.
The CFPB's lawsuit against Comerica, filed in December, alleged systematic failures in serving 3.4 million federal benefits recipients who held Comerica's Direct Express prepaid cards. The bank was accused of intentionally dropping millions of customer service calls, charging ATM fees to cardholders who were legally entitled to free withdrawals, mishandling complaints from consumers, and repeatedly failing to address complaints of fraud in an appropriate time period.
However, the dismissal was without prejudice, meaning the CFPB left the possibility open to reopen or refile the case later. This strategic move by the Trump-led CFPB was part of a broader effort to drop multiple enforcement cases, including against major banks like JPMorgan Chase, Bank of America, Wells Fargo, Capital One, and Comerica itself.
Comerica responded by suing the CFPB in a separate lawsuit, asserting the CFPB's investigation was "aggressive and overreaching." In response to the CFPB's request for a 90-day stay in its lawsuit against Comerica, the request was denied by Judge Jane J. Boyle. As of Monday, the CFPB did not immediately respond to a request for comment, and Comerica declined to comment on the dismissal of the case.
It's important to note that this dismissal without prejudice differs from prior dismissals. Under the Trump administration, these dismissals were part of a strategic rollback of Biden-era enforcement, directed by CFPB leadership appointed by Trump. The shift under Trump administration leadership signaled a marked reduction in aggressive corporate enforcement, contrasting with the Biden administration's more aggressive enforcement posture, which had pursued substantial penalties and oversight for financial institutions.
The Direct Express program was later taken over by BNY in January 2025, but Comerica agreed to work alongside BNY for three years to facilitate the transfer. The Treasury Department named BNY as the financial agent for the Direct Express program in November 2024, after informing Comerica it would be choosing a different program partner.
The dismissal of the case against Comerica is not unique. The CFPB has also dismissed its cases against JPMorgan Chase, Bank of America, Wells Fargo, and Zelle parent Early Warning Services, Capital One, SoLo Funds, and Townstone Financial with prejudice. This raises questions about the impact of these dismissals on consumer protections and the CFPB's role in enforcing financial regulations.
In summary, the CFPB’s dismissal of Comerica's case without prejudice under Trump reflects a deliberate policy to halt or slow enforcement cases from the prior administration while reserving the option to revisit them later. This represents a significant shift from the prior administration's approach, which emphasized active legal action to enforce consumer protections.
The CFPB's dismissal without prejudice of its lawsuit against Comerica Bank, a major U.S. bank, signified a broader strategy by the Trump administration to roll back enforcement cases initiated during the Biden administration, particularly those related to business practices and finance. However, the bank's alleged systematic failures in serving federal benefits recipients who held Comerica's Direct Express prepaid cards continue to raise questions about consumer protections and the CFPB's role in enforcing financial regulations.
