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US regulators ordered Bank of America to pay $250 million in fines and restitution for unfair fees and other banking violations that harmed consumers, authorities said Tuesday. bulletin news
Bank of America “double-dipped” on fees on customers for holding insufficient funds, repeatedly charging them a $35 penalty for the same transaction, said the Consumer Financial Protection Bureau.
The US bank also withheld promised cash and points to consumers who signed up for credit cards, the CFPB said.
In a third violation listed by the agency, Bank of America employees illegally applied for and enrolled consumers in credit card accounts without the consumer’s knowledge; these actions were tied to “now disbanded sales-based incentive goals and evaluation criteria,” the CFPB said.
“Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent,” said CFPB Director Rohit Chopra.
“These practices are illegal and undermine customer trust. The CFPB will be putting an end to these practices across the banking system.”
Under the orders, Bank of America will pay $90 million in penalties to the CFPB, $60 million in fines to the Office of the Comptroller of the Currency and $100 million in customer restitution.
Bank of America eliminated non-sufficient fund fees in the first half of 2022 and reduced overdraft fees from $35 to $10.
As a result of these changes, Bank of America saw a more than 90 percent drop in revenue from these fees, said an email from a Bank of America spokesperson that did not address the other issues in the enforcement.
jmb/bgs
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Notes from APS Radio News
As of March 31, 2023, Bank of America had assets of $3.1 trillion; as of 2022, it had reported a fall in net income of $27.53 billion.
On January 16, 2009, Bank of America received $20 billion and a guarantee of $118 billion in potential losses from the U.S. government through the Troubled Asset Relief Program (TARP). This was in addition to the $25 billion given to the bank in the fall of 2008 through TARP. The additional payment was part of a deal with the U.S. government to preserve Bank of America’s merger with Merrill Lynch.
According to Wikipedia, Berkshire Hathaway, the company of Warren Buffett, owned 12.8% of the shares of Bank of America.
