The Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency levied fines and restitution in the amount of $250 million on Bank of America yesterday, accusing the financial services giant of repeatedly charging NSF fees on the same transaction, withholding bonuses on credit cards, and illegally accessing consumers’ credit reports to open credit card accounts in their names.
Bank of America, which has 68 million customers, will pay $100 million in restitution to consumers, $90 million in penalties to the CFPB, and $60 million in penalties to the OCC. Along with paying the fines and restitution to consumers, the bank has also been ordered to stop opening unauthorized accounts, and disclose material limitations on any rewards cards bonuses and provide bonuses as advertised. It is also banned from charging repeat non-sufficient funds fees in the future.
A copy of the consent order with the CFPB can be accessed by clicking here.
The regulators accused Bank of America of violating the Consumer Financial Protection Act, the Fair Credit Reporting Act, and the Truth in Lending Act.
After declining a transaction because the consumer did not have sufficient funds in his or her account to cover the amount, merchants would often re-present the transactions. In those situations, if the consumer still did not have enough to cover the transaction, BofA would either charge an additional $35 NSF fee or paid the transaction and charged the consumer s $35 overdraft fee. It did not disclose to customers that multiple fees could result from the same transaction, and customers had no ability to know if a transaction would be resubmitted by a merchant.
“Overdraft programs should help, not harm, consumers,” said Acting Comptroller of the Currency Michael J. Hsu. “Today’s action demonstrates the OCC’s commitment to protecting consumers and promoting fairness and trust in banking. We expect banks to conduct their activities in compliance with all applicable laws and standards, and when they don’t, we will act accordingly.”
