U.S. Bank lawsuit alleges bank opened unauthorized accounts that resulted in fine

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U.S. Bank lawsuit overview: 

• Who: Plaintiff P. Michael Read, a U.S. Bank investor, filed a lawsuit against the bank. 
• Why: Read is suing after the bank allegedly opened unauthorized bank accounts, which resulted in a fine from the Consumer Finance Protection Bureau.
• Where: The U.S. Bank lawsuit was filed in Delaware’s Court of Chancery.
• What are my options: Credit Karma offers banking options like checking and savings accounts.

Plaintiff P. Michael Read filed a lawsuit trying to get U.S. Bank to pay investors, like himself, after the company opened unauthorized accounts, according to American Banker.

The lawsuit, filed in Delaware’s Court of Chancery, named U.S. Bancorp CEO Andy Cecere and other top leaders from the company. The U.S. Bank lawsuit alleges leadership had compensation and incentive practices that led to fake accounts being opened and then profited by concealing the misconduct while keeping shareholders like Read in the dark, American Banker reported.

The lawsuit comes after the Consumer Finance Protection Bureau fined U.S. Bank $37.5 million for the actions that led to the unauthorized U.S. Bank account openings. A CFPB investigation found that U.S. Bank illegally accessed customer credit reports and then opened checking and savings accounts, credit cards, and lines of credit without the customers’ permission.

“For over a decade, U.S. Bank knew its employees were taking advantage of its customers by misappropriating consumer data to create fictitious accounts,” CFPB Director Rohit Chopra said in a statement about the fine. “We all must do more to hold lawbreaking companies accountable when they abuse and misuse our sensitive personal data.”

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U.S. Bank imposed sales goals as a part of the employees’ job requirements and also both pressured and provided incentives to have employees sell multiple products and services to customers, the CFPB found.

Employees of the bank then unlawfully accessed credit reports and sensitive personal data from customers in order to apply for and then open unauthorized U.S. Bank accounts, a practice that ultimately hurt shareholders, the U.S. Bank lawsuit claimed. U.S. Bank was aware of a similar issue at Wells Fargo but did nothing to stop it at their bank, the U.S. Bank lawsuit claims.

Earlier this year, two participants in the U.S. Bank’s 401(k) savings plan decided to sue the bank, alleging it mismanaged their retirement savings by allowing the plan to pay overly high fees.

Has anyone ever attempted to open a bank account in your name? Let us know in the comments.

The U.S. Bank unauthorized accounts lawsuit is Read v. Cecere, et al., Case No. 2023-0792, in the Delaware Court of Chancery.

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