Bank of America Faces Heavy Fines from US Regulators for Misconduct
Bank of America has been hit with significant penalties by the US Consumer Financial Protection Bureau (CFPB) following allegations of deceptive practices and unjust fees. The bank has been ordered to pay $150 million in penalties, as well as over $100 million in restitution to affected customers.
According to the CFPB, Bank of America engaged in harmful practices that impacted hundreds of thousands of consumers across various products and services over several years. One of the key allegations is that the bank charged customers $35 for declined transactions due to insufficient funds, and then proceeded to charge multiple fees for the same transaction. This practice, known as double-dipping, resulted in substantial additional revenue for the bank.
Furthermore, the CFPB claims that Bank of America withheld cash and points rewards on credit cards, denied sign-up bonuses to customers, and applied for credit card accounts without proper authorization from consumers. The bank’s employees also allegedly used customers’ credit reports without permission to complete credit card applications.
As a result of these findings, the CFPB has issued a series of directives to the bank. Bank of America is required to cease these unlawful practices, provide compensation to affected consumers, and pay a $90 million penalty to the CFPB. Additionally, a $60 million penalty is to be paid to the Office of the Comptroller of the Currency (OCC) specifically for the double-dipping fee practices.
This is not the first time Bank of America has faced regulatory action. In 2014, the bank was fined $727 million for engaging in illegal credit card practices. In 2022, the CFPB ordered a $10 million civil penalty over unlawful garnishments, and an additional $225 million fine was imposed by both the CFPB and OCC for mishandling unemployment benefit disbursements.
Bank of America now faces significant financial consequences and must take immediate steps to rectify its wrongdoing and restore trust among its customers.
