U.S. Bank Fined $36M for Blocking Unemployment Benefits

Bank claims it prevented over $375M in fraud despite penalties for freezing tens of thousands of accounts during COVID-19 pandemic

U.S. Bank has been fined $36 million by the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) for blocking access to unemployment benefits during the COVID-19 pandemic.
The bank had contracts with at least 19 states and the District of Columbia to deliver unemployment benefits through its prepaid card, but froze tens of thousands of accounts due to expanded antifraud controls.
Affected consumers were required to provide burdensome paperwork to regain access to their frozen benefits.
U.S. Bank has been ordered to pay nearly $21 million, including a $15 million penalty and $5.7 million in redress to consumers. The OCC separately assessed a $15 million penalty.
Despite the penalties, U.S. Bank claims it prevented fraud of over $375 million and returned hundreds of millions in additional funds sent to questionable accounts.