Bank of America Corp. (NYSE: BAC), the second-largest bank in the U.S. with $2.4 trillion in assets and $1.9 trillion in domestic deposits as of March 31, and a major player in Atlanta’s banking scene, has been instructed by the CFPB to pay $250 million. This comes in the wake of a federal investigation into the creation of fake accounts and other alleged misconduct. This case is separate from any involving Wells Fargo & Co.
The CFPB announced today that Bank of America has violated federal rules, and as a result, will pay $250 million. This sum includes $100 million for customers who were affected by the bank’s practices and $150 million in fines — $90 million for the CFPB and $60 million for the Office of the Comptroller of the Currency.
Bank of America stands accused of overcharging fees on customers with low account balances, failing to deliver promised credit card rewards, and using personal information to open unauthorized accounts.
The CFPB’s investigation revealed that since 2012, Bank of America employees have been opening credit card accounts without customer consent to meet sales targets. Customers affected by this practice faced unfair fees, damage to their credit scores, and had to spend time correcting errors.
This situation may remind some of Wells Fargo’s own fake-accounts scandal. Wells Fargo has been working for years to recover from this and other issues, operating under a $2 trillion asset cap. Recently, it agreed to a $1 billion settlement for a class-action lawsuit, following a $3.7 billion settlement with the CFPB.
The CFPB also claims that Bank of America collected “junk fees” by repeatedly charging a $35 fee for insufficient funds for the same transaction. The OCC has deemed this practice illegal.
Bank of America has stated that it has already changed this policy. “We voluntarily reduced overdraft fees and eliminated all nonsufficient fund fees in the first half of 2022,” a bank spokesperson said. “Revenue from these fees has dropped more than 90%.”
The CFPB also accused Bank of America of not delivering promised credit card rewards. “Such practices are illegal and undermine customer trust,” said CFPB Director Rohit Chopra. “The CFPB will be putting an end to these practices across the banking system.”
Bank of America also holds the position of being metro Atlanta’s second-largest bank by deposits.
