CFPB investigating U.S. Bancorp over consumer sales practices

U.S. Bancorp is facing regulatory scrutiny over how it sells products to consumers.

The $553.8 billion-asset company is under investigation by the Consumer Financial Protection Bureau regarding “certain of the company’s consumer sales practices,” according to a securities filing this week.

U.S. Bancorp said that it “has responded and continues to respond to the CFPB.” The Minneapolis-based company added that it is “cooperating fully with all pending examinations, inquiries and investigations, any of which could lead to administrative or legal proceedings or settlements.”

The CFPB did not immediately respond to a request for comment. A U.S. Bancorp spokesperson said in an email that the company cannot provide additional information because of the confidential nature of supervisory work.

"It is important to note that due to their complex nature, regulatory exams, inquiries and investigations often take some time before they are resolved," the statement read.

Luke Sharrett/Bloomberg

The CFPB has been scrutinizing banks’ sales practices in the wake of Wells Fargo’s fake-accounts scandal. In 2019 the agency opened a civil investigation into Bank of America to determine whether the Charlotte, North Carolina-based company violated federal law by opening credit card accounts without customers’ knowledge.

Last year, the consumer bureau sued Cincinnati-based Fifth Third Bancorp for allegedly opening customer accounts without their authorization between 2010 through 2016. That case is expected to go to trial in 2022 or later, unless a settlement is reached.

Since 2018, the CFPB has reached settlements with TCF Financial and TD Bank Group in connection with the marketing and sale of overdraft services. And in November, Regions Financial disclosed that it was responding to a civil investigative demand from the CFPB over certain overdraft policies and practices.

After the Wells Fargo scandal broke in 2016, then-U.S. Bancorp CEO Richard Davis said that the company did not impose sales quotas on its bankers and had “never, ever” looked at cross-sell ratios.

U.S. Bancorp currently has a conduct risk committee that oversees the risks associated with ethics complaints, internal fraud and sales practices conduct, according to regulatory filings by the company.

The firm also stated in a report last year that it has a sales practices oversight policy that is designed to ensure a unified approach across the company to prevent or otherwise detect sales misconduct.

This story has been updated to add comments from U.S. Bancorp.