Title: Bank of America to Pay Over $100 Million in Penalties for Unlawful Practices
By Michelle Chapman – The Associated Press
Bank of America, one of America’s largest financial institutions, has been ordered to pay more than $100 million to its clients for various unlawful practices by regulatory authorities.
The Office of Financial Protection reported on Tuesday that Bank of America will pay a staggering $90 million in penalties to its organization and an additional $60 million in fines to the Office of the Comptroller of the Currency. The penalties were imposed after an investigation found that the bank had been engaging in deceptive practices, including double charging fees, withholding reward bonuses, and opening unauthorized accounts.
The Consumer Financial Protection Bureau discovered that Bank of America had been charging customers a $35 fee for declined transactions due to insufficient funds. Shockingly, the bank allowed the fee to be charged twice for the same transaction, resulting in customers being unfairly charged. The bank, however, voluntarily reduced overdraft fees and waived non-sufficient fund fees in the first half of the previous year.
In addition to the fee-related misconduct, Bank of America was accused by the regulatory agency of unlawfully withholding promised bonuses for credit card accounts. Since 2012, bank employees had been signing up consumers for credit cards without their knowledge or authorization, bringing this malpractice to light.
Director of the Consumer Financial Protection Bureau, Rohit Chopra, stated, “Bank of America improperly withheld credit card rewards, doubled fees, and opened accounts without consent. These practices are illegal and undermine customer trust.”
This is not the first time Bank of America has faced legal action for its unethical conduct. In 2014, the agency ordered the bank to pay $727 million for illegal credit card practices. Last year, the bank was slapped with a $10 million civil penalty for illegal liens.
Furthermore, in 2022, Bank of America had to surrender $225 million and compensate hundreds of millions of dollars to consumers for erroneous benefit payments related to unemployment during the COVID-19 pandemic. These repeated instances of misconduct have raised concerns about the bank’s commitment to customer trust and ethical banking practices.
Bank of America, headquartered in Charlotte, North Carolina, serves a massive customer base of 68 million people and small businesses. As of March 31, the bank boasted $2.4 trillion in consolidated assets and $1.9 trillion in domestic deposits, solidifying its position as the second-largest bank in the United States.
The latest penalties imposed on Bank of America underscore the urgent need for financial institutions to prioritize transparency, accountability, and customer protection.