CFPB files lawsuit against Comerica tied to Direct Express prepaid program

The Consumer Financial Protection Bureau has filed a lawsuit against Comerica for alleged deficiencies related to the Dallas company’s administration of the Direct Express program.

The lawsuit, filed in the U.S. District Court for the Northern District of Texas, claims that the $71.8 billion-asset Comerica deliberately disconnected customer service calls, charged illegal ATM fees, and mishandled customer complaints, among other things.

The CFBP wants a judge to order Comerica to end those practices, give refunds to affected customers, and pay civil penalties.

Direct Express is a prepared card program offered by the Treasury Department. Comerica recently lost the contract for the program to BNY.

The lawsuit is “an obviously unfortunate headline and there could be some penalties to resolve,” Scott Siefers, an analyst at Piper Sander, wrote in a note to clients. Comerica’s “alleged Direct Express program headaches have been reported extensively in the media and therefore probably won’t shock investors. … Hopefully [this issue is] no more than an unwelcome bump in the road.”