Cash-Sweep Program
Futo v. U.S. Bancorp
Date: Jan. 30, 2026
Issue: Whether U.S. Bancorp unlawfully paid customers below-market interest through its cash-sweep program.
Case Summary: A Minnesota federal court dismissed with prejudice a lawsuit alleging that U.S. Bancorp shortchanged customers on interest through its cash-sweep program.
In April 2025, Adam Futo and Saul Ellis sued U.S. Bancorp, alleging its broker-dealer subsidiary, U.S. Bancorp Investments, Inc. (USBI), shortchanged customers through its cash-sweep program. Futo and Ellis opened brokerage accounts, signed governing agreements and disclosures, and chose to enroll in USBI’s cash-sweep program, also known as the Bank Deposit Program. This program automatically transferred uninvested cash into interest-bearing deposit accounts at affiliated U.S. Bank. The disclosures explained how the program worked, disclosed that USBI received financial benefits, and stated that USBI had no obligation to provide the highest available interest rate.
Plaintiffs alleged USBI paid below-market interest rates compared to competitors and market benchmarks. They brought seven claims under Minnesota law: breach of fiduciary duty, negligence, breach of the implied covenant of good faith and fair dealing, negligent misrepresentation and omission, violations of the Minnesota Consumer Fraud Act and the Minnesota Deceptive Trade Practices Act, and unjust enrichment. They claimed defendants structured and operated the program to benefit themselves while paying customers unreasonably low rates. U.S. Bancorp moved to dismiss, arguing, among other things, the independent-duty Rule bars Plaintiffs’ claims.
Judge Eric Tostrud first ruled that Minnesota’s independent duty rule barred Plaintiffs’ negligence claim because it relied entirely on obligations created by the parties’ contracts. The court explained a plaintiff may not convert a contract dispute into a tort claim unless the defendant owed a legal duty independent of the agreement. Plaintiffs pointed to an alleged agency relationship, USBI’s control over customer funds, and various industry standards, but the court found that these theories either stemmed from the contracts or were abandoned at the hearing. Because no independent duty remained, the court dismissed the negligence claim and then proceeded to analyze the remaining claims one at a time.
Next, the court dismissed the breach of fiduciary duty and implied covenant claims. The court concluded an ordinary broker customer relationship does not create a fiduciary duty under Minnesota law and that Plaintiffs failed to allege special circumstances establishing a de facto fiduciary relationship. The court emphasized USBI disclosed its financial interests, disclaimed any promise of the highest available interest rate, and limited the scope of any agency relationship in its written materials. The court also rejected the implied covenant claim, finding no plausible allegation that USBI acted dishonestly or in subjective bad faith, and concluding that imposing a duty to pay a reasonable interest rate would contradict the contracts’ express terms.
The court then dismissed the negligent misrepresentation, statutory consumer protection, and unjust enrichment claims. The court determined no plausible false statement or omission existed because USBI disclosed its financial incentives, disclaimed any guarantee of specific interest rates, and reasonably directed customers to a website for current rate information. For the same reason, the court rejected Plaintiffs’ claims under the Minnesota Consumer Fraud Act and Deceptive Trade Practices Act, concluding the agreements did not promise reasonable or market-based rates. Finally, the court dismissed the unjust enrichment claim because valid contracts governed the parties’ relationship and controlled the challenged conduct, leaving no basis for equitable relief.
Bottom Line: The court dismissed with prejudice, concluding that amendment would be futile, and Plaintiffs had already failed to cure the defects in their claims despite having an opportunity to amend.
Document: Opinion
