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U.S. Bank Will Reimburse The Illegal Pandemic Conduct With $36 Million

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New Pandemic: Russia Suspects US For Developing New Mutations Of Viruses Through New Office Of Pandemic Preparedness And Response Policy Photo From: iStock

Top federal banking regulators said on Tuesday that U.S. Bank will pay $36 million to settle claims that the business improperly prevented unemployed customers from receiving unemployment benefits during the coronavirus outbreak.

Unemployed Americans

Using its prepaid card, U.S. Bank was contracted by at least 19 states and the District of Columbia to provide unemployment compensation to millions of newly unemployed Americans during the start of the COVID-19 pandemic.

However, the U.S. Office of the Comptroller of the Currency and U.S. Consumer Financial Protection Bureau report that the country’s fifth-largest lender banned tens of thousands of prepaid card accounts owing to increased antifraud procedures without providing a method for customers to recover access.

Blocked Access To Accounts

Pandemic

Source- AARP

Director of the CFPB Rohit Chopra stated in a statement that “U.S. Bank blocked access to accounts and demanded burdensome paperwork in order for consumers to regain access to their frozen benefits,” noting that the unemployment rate was nearly 15% at the time.

A U.S. Bank representative said in a statement that the bank was dealing with difficulties in “unprecedented times” because of the 40-fold rise in state unemployment benefits that needed to be distributed, which increased the possibility of fraud.

U.S. Bank is required to pay nearly $21 million as part of a CFPB order, which includes a $15 million penalty and $5.7 million in consumer compensation.

The OCC separately said it had issued a $15 million penalty on U.S. Bank, which had agreed to deliver remedies to injured consumers.

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