Why the US fines Bank of America (again).
Bank of America, the second largest bank in the United States, has been fined $250 million. The institute has committed many improprieties (sanctioned) in recent years
Bank of America, the second-largest bank in the United States, agreed on Tuesday to pay a sum of $250 million in fines and damages to settle allegations of systematically charging its customers double fees, opening accounts without authorization and failure to disburse credit card extra credits.
Specifically, Bank of America will repay a total of $100 million to injured customers and another $150 million in civil penalties for violating a series of laws since 2012, as determined by the CFPB and the OCC, two government agencies that oversee on banks operating in the United States.
THE IMPROPERNESS OF BANK OF AMERICA
In a release, the CFPB says that from February 2018 to February 2022, Bank of America raised hundreds of millions of dollars through multiple-fee charges to customers who did not have sufficient funds in their accounts. According to the authorities, consumers could not have anticipated that they would be charged $35 fees for each transaction rejected by the bank. The institution said it voluntarily eliminated or reduced a number of fees last year.
Commissions related to the absence of sufficient funds on accounts are considered junk fees ("junk fees" by the CFPB, which intends to eliminate them: "these practices are illegal and damage consumer confidence," said director Rohit Chopra.
In addition, Bank of America employees — some under pressure to sell, others out of interest in bonuses — opened credit card accounts with unwitting consumers—an illegal practice, even though these accounts were a "small percentage" of new accounts opened at the institute.
Ultimately, the bank failed to honor cash rewards and bonus points promised to tens of thousands of its credit card users.
12 MILLION TO THE SEC
In parallel with the $250 million, Bank of America – or more precisely Merrill Lynch, its financial advisory arm – will pay the Securities and Exchange Commission, the federal agency that oversees the stock exchange, $12 million for failing to inform the authorities about a series of suspicious activities discovered in 2019.
– Read also: Why the SEC fines Goldman Sachs on ESGs
ALL FINES
The recent history of Bank of America fines begins in April 2014, when the institution had to pay 727 million for charging credit services to 1.9 million users who never received them.
Then, in May 2022, the bank was fined 10 million for having illegally frozen some accounts, charging users the foreclosure fees. Finally, in July of the same year, he received a 225 million fine for an error ( botching ) in the distribution of state unemployment benefits during the pandemic.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/bank-of-america-multa/ on Wed, 12 Jul 2023 13:03:05 +0000.