US Bank has been ordered to pay almost $36 million due to its inability to allow customers access to their unemployment benefits during the COVID-19 pandemic. These orders came from two different regulators. The Consumer Financial Protection Bureau (CFPB) has asked US Bank to pay $20.7 million because it implemented heightened anti-fraud measures that left those with a ReliaCard prepaid card unable to access their funds. Some US Bank customers reported unauthorized transfers from their accounts and, in some situations, the bank failed to offer provisional credits.

US Bank argued that a significant increase in state-based unemployment benefits during the pandemic’s peak justified its actions. Bank officials say their actions helped prevent fraud. Moreover, they contend a small percentage of cardholders experienced issues with extended holds. However, the Office of the Comptroller of the Currency (OCC) also issued a penalty for US Bank, imposing a fine of $15 million because the bank’s processes for allowing clients to regain access to their frozen unemployment benefits were not adequate.

US Bank was not the only large financial institution to face penalties related to the distribution of unemployment benefits during the pandemic. Bank of America was fined $225 million over administration deficiencies in its prepaid card program. The bank implemented a faulty fraud filter, causing account freezes, and the lack of available agents made it hard for clients to regain access to their accounts.