The Consumer Financial Protection Bureau (CFPB) has requested a federal judge to delay the enforcement action it initiated against Comerica Bank in December. This move comes as the agency undergoes leadership changes and reassesses its legal priorities. The CFPB had accused Comerica Bank of mismanaging federal benefit payments through the Direct Express program, which serves millions of beneficiaries. The request for a stay follows the CFPB’s recent decision to drop multiple enforcement actions, signaling potential shifts in regulatory strategies.
Previous reports on the CFPB’s actions against Comerica Bank highlighted allegations regarding customer service failures and improper fees. The Direct Express program, which Comerica Bank has handled since 2008, has faced scrutiny over its administration and treatment of beneficiaries. In the past, the CFPB has pursued enforcement against financial institutions for similar issues, but the agency’s recent actions suggest a review of its approach to regulatory oversight.
Why is the CFPB Requesting a Delay?
CFPB Chief Legal Officer Mark Paoletta stated in court documents that the agency is evaluating its next steps and that the new leadership requires additional time for review. This follows a pattern of enforcement cases being reconsidered, including the CFPB’s withdrawal of legal actions against Capital One and other financial institutions. Regulatory shifts under new leadership have raised questions about how financial oversight will be conducted moving forward.
What Are the Allegations Against Comerica Bank?
The CFPB’s complaint alleged that Comerica Bank systematically disconnected customer service calls, charged unauthorized ATM fees, and imposed unlawful terms on account holders. Additionally, the agency accused the bank of failing to investigate account issues and requiring customers to close their accounts to halt preauthorized transactions. These allegations were tied to the bank’s administration of the Direct Express program, which facilitates the distribution of federal benefits through prepaid debit cards.
In response to the CFPB’s lawsuit, Comerica Bank defended its role in managing the Direct Express program and challenged the agency’s regulatory authority in court. The bank stated in a legal filing that it has operated within regulations and intends to continue its defense.
“We will continue to defend our record as the financial agent for the Direct Express program,” Comerica Bank stated.
Meanwhile, the CFPB’s leadership transition has contributed to uncertainty over how aggressively the agency will pursue enforcement actions.
The CFPB’s decision to pause its lawsuit against Comerica Bank follows a broader trend of regulatory changes under the Trump administration. Jonathan McKernan, the administration’s nominee to lead the CFPB, expressed concerns about the agency’s approach, arguing that it has not always acted impartially.
“The agency has gotten in the way of its own mission and has acted in a politicized manner,” McKernan said during his confirmation hearing.
These remarks, combined with the agency’s recent withdrawal of multiple enforcement actions, indicate a shift in how financial regulations may be enforced.
Delays in enforcement actions can impact both financial institutions and consumers, as regulatory decisions affect banking operations and customer protections. For beneficiaries relying on the Direct Express program, concerns remain about access to their funds and the resolution of account-related issues. The CFPB’s decision to reassess its stance on Comerica Bank and other financial entities suggests that future enforcement strategies could differ significantly from past practices. Whether this results in reduced oversight or a more selective approach to regulation remains to be seen.
